Calimesa City Council
May 5, 2025

Regular Meeting of the Calimesa City Council
Monday, May 5, 2025

CALL TO ORDER
ROLL CALL: MAYOR MOLINA, MAYOR PRO TEM CERVANTEZ, COUNCIL MEMBER CUNDIEFF, COUNCIL MEMBER GARCIA AND COUNCIL MEMBER MANLY.

STAFF: CITY MANAGER KOLBOW, CITY ATTORNEY FLOWER, CITY CLERK

GERDES, FINANCE DIRECTOR REID, INTERIM PUBLIC WORKS DIRECTOR SHAKIR, CITY ENGINEER THORNTON, FIRE CHIEF O’CONNELL AND SHERIFF CAPTAIN NORTHRUP.

PLEDGE OF ALLEGIANCE

COMMUNICATIONS FROM THE PUBLIC
Pursuant to the Brown Act, this is the opportunity for members of the public to directly address the Council on any item within the Council’s subject matter jurisdiction. Please note that this is also the time in which members of the public may address the Council on any item on the Consent Calendar. This is not the time for City Council discussion of non-agenda items. After receiving public comments, Council Members, or staff, after being recognized by the Mayor, may briefly respond to statements made by the public or questions posed by the public. In addition, Council Members may ask questions for clarification or make a referral to staff for factual information to be reported back to the Council at a later meeting.

APPROVAL OF THE AGENDA, CONSENT CALENDAR AND WAIVER OF FULL READING OF ORDINANCES This is the time for the City Council to notify the public of any changes to the agenda; such as removal of an agenda item, rearrangement of the agenda, postponement of an agenda item or continuance of an item to a future meeting. This is also the time for the City Council to remove items from the Consent Calendar for individual consideration. Waiver of full reading of ordinances does not take policy action or approve or disapprove any ordinances on the agenda, it simply means that the entire text of the ordinance will not be read.

RECOMMENDATION: Move to approve the agenda and consent calendar Motion________________________ Second_______________________ Vote___________________________ Regular Meeting of the Calimesa City Council
Meeting Agenda
Monday, May 5, 2025 – 6:00 p.m.

Norton Younglove Multipurpose Senior Center
908 Park Avenue, Calimesa, CA 92320
Linda Molina, Mayor  Jeff Cervantez, Mayor Pro Tem
Eric Cundieff, Council Member  Edgar Garcia, Council Member  John Manly, Council Member Will Kolbow, City Manager  Steven Flower, City Attorney The Calimesa City Council will be conducting this meeting in the Norton Younglove Senior Center. Members of the public may attend this meeting in person at the Norton Younglove Senior Center, 908 Park Avenue, Calimesa, CA 92320, or the public may view the City Council meetings live at https://www.youtube.com/@calimesacity900/live beginning at 6:00 p.m.

Submission of Public Comments: Public comment will be allowed by completing a speaker slip and providing it to the City Clerk at the meeting. Please observe a time limit of three (3) minutes when giving your presentation. When called upon, please step forward to the microphone, state your name for the record, whom you represent and any statement you wish to make. Please be advised that you may not defer your three (3) minutes to another speaker.

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a City meeting or other services offered by this City, please contact the City Clerk’s Office, (909) 795-9801. Notification of at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service. Any public writings distributed by the City to at least a majority of the Council Members regarding any item on this regular meeting agenda will be made available at the public counter at City Hall located at 908 Park Avenue, Calimesa, CA 92320.

Regular Meeting of the Calimesa City Council
Monday, May 5, 2025

CONSENT CALENDAR (Items 1 – 8)
The following items on the Consent Calendar are routine and customary items and are enacted by a single motion, with the exception of items previously removed during “Approval of the Agenda” for individual consideration. Any items removed shall be individually considered immediately after taking action on the Consent Calendar.

1. APPROVAL OF CITY COUNCIL ACTION MINUTES.
a) City Council action minutes of April 21, 2025 regular meeting.

2. RECEIVE AND FILE CITY COMMISSION & BOARD MINUTES.
a) There are no minutes ready for approval at this time.

3. APPROVAL OF WARRANT REGISTERS.
a) Check Register Report with a total of $464,968.13 (Check Nos.43452-43505) b) April 24, 2025 Payroll of $114,383.44

4. TREASURER’S REPORT FOR THE MONTH ENDED MARCH 31, 2025.

RECOMMENDATION: That the City Council receive and file the Investment Report for the month ended March 31, 2025.

5. APPROVE 2
nd READING BY TITLE ONLY AND ADOPT ORDINANCE NO. 410, AN

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CALIMESA, CALIFORNIA AMENDING SECTIONS 9.05.030, 9.05.040, 9.05.050, 9.05.090, 9.05.100, 9.05.110, 9.05.120,

9.05.140 AND 9.05.180 OF THE CALIMESA MUNICIPAL CODE RELATED TO THE MOBILE

HOME PARK RENT STABILIZATION PROGRAM PERTAINING TO THE IMPLEMENTATION

OF A HEARING OFFICER PROCESS AND REPEAL OF THE MOBILE HOME RENT

STABILIZATION BOARD
RECOMMENDATION: That the City Council approve 2nd reading by title only and adopt Ordinance No. 410, an Ordinance of the City Council of the City of Calimesa, California amending sections

9.05.030, 9.05.040, 9.05.050, 9.05.090, 9.05.100, 9.05.110, 9.05.120, 9.05.140 and 9.05.180 of the Calimesa Municipal Code related to the Mobile Home Park Rent Stabilization Program pertaining to the implementation of a hearing officer process and repeal of the Mobile Home Rent Stabilization Board.

6. RESOLUTION OF OPPOSITION TO SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT’S PROPOSED AMENDED RULES 1111 AND 1121.

RECOMMENDATION: That the City Council adopt Resolution 2025-15, A Resolution of the City of Calimesa, California Opposing the South Coast Air Quality Management District’s Proposed Amended Rules 1111 and 1121.

7. RESOLUTION APPROVING THE AMENDMENT OF THE RESTATED CITY OF CALIMESA

CAFETERIA PLAN AND PERSONNEL RULES
RECOMMENDATION: That the City Council:

1. Resolution 2025-16, A Resolution of the City Council of the City of Calimesa, California Amending the Personnel Rules and Regulations for the City of Calimesa Adopted by the City Council on November 20, 2017.

2. Resolution 2025-17, A Resolution of the City Council of the City of Calimesa, California Approving the Adoption of the Restated City of Calimesa Cafeteria Plan and Rescinding Resolution 2022-31 in its Entirety.
8 4TH STREET - PAVEMENT REHABILITATION AGREEMENT WITH SAN GORGONIO PASS WATER AGENCY.

RECOMMENDATION: That the City Council authorize the Mayor to execute an agreement with San Gorgonio Pass Water Agency (SGPWA) for 4th Street Pavement Rehabilitation (Flordason Drive to County Line Road).

Regular Meeting of the Calimesa City Council
Monday, May 5, 2025

SHERIFF CAPTAIN REPORT

FIRE CHIEF REPORT

BUSINESS ITEMS

9. COUNCIL DISCUSSION AND CONSIDERATION OF A BUDGET ADJUSTMENT FOR

ADDITIONAL FUNDING FOR THE CALIMESA CULTURAL AND PERFORMING ARTS ASSOCIATION FOR FISCAL YEAR 2024-2025.

RECOMMENDATION: That the City Council:

1. Discuss and consider additional funding for the Calimesa Cultural and Performing Arts Association for Fiscal Year 2024-2025.

2. If additional funding is approved, adopt Resolution 2025-18, A Resolution of the City Council of the City of Calimesa, California, Amending the FY 2024-25 Budget to Include an Adjustment in the Community Services Community Partnerships Account in the General Fund.

MAYOR & COUNCIL MEMBER REPORTING OF COUNTY & REGIONAL MEETINGS/CONFERENCES This is the time for general comments, announcements, reports on meetings attended at public expense as required by AB 1234, requests of staff, and other issues of concern to Council Members may be presented briefly at this time. The Council may not legally take action on any item presented at this time other than to direct staff to investigate a complaint or place an item on a future agenda unless (1) by a majority vote, the Council determines that an emergency situation exists, as defined by Government Code § 54956.5 or (2) by a four-fifths vote, the Council determines that there is a need for immediate action and the need for action arose subsequent to the agenda being posted as required by Government Code § 54954.2(b).

CITY MANAGER COMMENTS & REPORTS

CLOSED SESSION ITEMS
A. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6. City Negotiator: Will Kolbow, City Manager and Darlene Gerdes, Deputy City Manager/City Clerk/Human Resources. Represented Employees: Calimesa Professional Firefighters Association.

ADJOURNMENT
Adjourn to the Special Fiscal Year 25/26 Budget Workshop of the City Council on Monday, May 19, 2025 at 3:00 p.m.

City Council Meeting
Agenda Report
Agenda Item No. 1
SUBJECT: APPROVAL OF CITY COUNCIL MEETING MINUTES
MEETING DATE: May 5, 2025
PREPARED BY: Darlene Gerdes, Deputy City Manager/City Clerk RECOMMENDATION: That the City Council approve the action minutes as presented for the Regular City Council meeting of April 21, 2025.

ATTACHMENTS:

Attachment A: City Council action minutes of April 21, 2025 regular meeting.

City Council Meeting
Agenda Report
Agenda Item No. 2
SUBJECT: APPROVAL OF COMMISSION MEETING MINUTES
MEETING DATE: May 5, 2025
PREPARED BY: Darlene Gerdes, Deputy City Manager/City Clerk There are no minutes ready for approval at this time

City Council Meeting
Agenda Report
Agenda Item No. 3
SUBJECT: APPROVAL OF WARRANT REGISTER
MEETING DATE: May 5, 2025
PREPARED BY: Celeste Reid, Finance Director
RECOMMENDATION: That the City Council approve the Warrant Register as presented.

SUMMARY: The attached Check Register Report for City Council’s approval is as follows:
a) Check Register Report with a total of $464,968.13 (Check Nos.43452-43505) b) April 24, 2025 Payroll of $114,383.44

City Council Meeting
Agenda Report
Agenda Item No. 4
SUBJECT: TREASURER’S REPORT FOR THE MONTH ENDED
MARCH 31,2025
MEETING DATE: May 5, 2025
PREPARED BY: Celeste Reid, Finance Director and Treasurer RECOMMENDATION: That the City Council receive and file the Investment Report for the month ended March 31, 2025.

BACKGROUND: Pursuant to Council Resolution No. 2024-60 approved on November 4, 2024, the monthly Treasurer’s Report is hereby submitted. The report complies with the aforementioned Council resolution, as well as Government Code Section 53646.

DISCUSSION: The investment report provides information in accordance with the Investment Policy approved by Council Resolution No. 2024-60. Information includes the reporting of realized and unrealized gain and loss activity for the respective month of reporting. Generally, unrealized gains and losses are the day-to-day increases or decreases in an assets value. Until an investment is sold for cash, the gains or losses remain unrealized. Realized gains and losses reflect the results of selling of investments and are the difference between the cost basis and the market value as of the transaction date of sale. The City will continually have reportable changes of unrealized gain and loss activity between cost basis and market value as underlying investments are subject to the variability of market conditions. Staff evaluates investment options on an ongoing basis to ensure reasonable access to funds and reserves are set aside to maintain availability of cash position for general operations and capital assets.

Significant transactions during the month include transfers of $500,000 on Mar 18, 2025, from the LAIF Investment account to the General Fund account.

FISCAL IMPACT: Revenue of $7,615 of interest and dividend earnings was recognized for the CFD and Successor Agency funds.

ATTACHMENTS:

Attachment A: Treasurer’s Report for the month ended March 31, 2025.

City Council Meeting
Agenda Report
Agenda Item No. 5
SUBJECT: 2

ND READING BY TITLE ONLY AND ADOPTION OF ORDINANCE
NO. 410, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF CALIMESA, CALIFORNIA AMENDING SECTIONS 9.05.030,

9.05.040, 9.05.050, 9.05.090, 9.05.100, 9.05.110, 9.05.120,

9.05.140 AND 9.05.180 OF THE CALIMESA MUNICIPAL CODE

RELATED TO THE MOBILE HOME PARK RENT STABILIZATION

PROGRAM PERTAINING TO THE IMPLEMENTATION OF A

HEARING OFFICER PROCESS AND REPEAL OF THE MOBILE
HOME RENT STABILIZATION BOARD.

MEETING DATE: May 5, 2025
PREPARED BY: Darlene Gerdes, Deputy City Manager/City Clerk RECOMMENDATION: That the City Council approve 2nd reading, by title only and adopt Ordinance No. 410, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CALIMESA, CALIFORNIA AMENDING SECTIONS 9.05.030, 9.05.040, 9.05.050, 9.05.090, 9.05.100, 9.05.110, 9.05.120,

9.05.140 AND 9.05.180 OF THE CALIMESA MUNICIPAL CODE RELATED TO THE MOBILE

HOME PARK RENT STABILIZATION PROGRAM PERTAINING TO THE IMPLEMENTATION OF

A HEARING OFFICER PROCESS AND REPEAL OF THE MOBILE HOME RENT STABILIZATION BOARD.

ATTACHMENTS:

Attachment A: Ordinance No. 410.

ORDINANCE NO. 410

AN ORDINANCE OF THE CITY OF CALIMESA CALIFORNIA UPDATING AND CLARIFYING PROVISIONS OF CHAPTER 9.05 OF THE CALIMESA

MUNICIPAL CODE PERTAINING TO MOBILE HOME RENT

STABILIZATION AND AMENDING THE CALIMESA MUNICIPAL CODE

PERTAINING TO THE IMPLEMENTATION OF A HEARING OFFICER

PROCESS AND REPEAL OF THE MOBILE HOME RENT

STABILIZATION BOARD
WHEREAS, the City Council of Calimesa (“City”) previously adopted Chapter 9.05, containing Sections 9.05.010 through 9.05.170 of the Calimesa Municipal Code, pertaining to Mobile Home Rent Stabilization (hereinafter the “Ordinance”), and further adopted Administrative Rules for the implementation of the Ordinance (the “Rules”); and WHEREAS, the City Council directed the issuance of a Request for Proposal seeking Mobile Home Rent Stabilization Hearing Officer services in place of the Mobile Home Rent Stabilization Board processes;

NOW THEREFORE THE CITY COUNCIL OF THE CITY OF CALIMESA DOES HEREBY ORDAIN AS FOLLOWS:

Section 1. The definition of “Appellant” in Section 9.05.030, “Definitions” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended to read as follows:
“ “Appellant” means any park owner or park resident, or designated representative thereof, who files an appeal of a decision by the hearing officer on a capital improvement rent increase or special rent increase to the city council.” Section 2. The definition of “board” in Section 9.05.030, “Definitions” of Chapter

9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby repealed.

Section 3. The definition of “Consumer Price Index” or “CPI” of Section

9.05.030, “Definitions” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended to read as follows:
“ “Consumer Price Index” or “CPI” means the Consumer Price Index for All Items in Riverside-San Bernardino-Ontario, CA, All Urban Consumers, not seasonally adjusted, published by the Bureau of Labor Statistics, U.S. Department of Labor, or any successor index.”

Section 4. The definition of “Hearing Officer” is hereby added to Section

9.05.030, “Definitions” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code to read as follows:
“ “Hearing Officer” means the person established by this chapter to perform such duties as may be delegated by the city council.”
Section 5. Section 9.05.040, “Mobile Home Rent Stabilization Board” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby repealed in its entirety and replaced by the following language adopted :
“9.05.040 Mobile Home Rent Stabilization Hearing Officer There shall be a hearing officer of hearing officers who shall be appointed by the City Council. Each hearing officer shall serve a term of three years or until their successor is appointed.”
Section 6. Section 9.05.050, “Powers and Duties” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.050 Powers and duties.

Within the limitations provided by law, the mobile home rent stabilization hearing officer shall have the following powers and duties:

A To hold meetings from time to time as requested by the mayor, the city council, the city manager, or upon the filing of a petition with the city clerk.

B. To examine any rental agreement submitted to the hearing officer by any party to the rental agreement for the purpose of determining whether the space is subject to rent control under this chapter when reviewing a petition for a rent increase under this chapter.

C. To receive, investigate, conduct hearings on and approve, conditionally approve or disapprove petitions for, or protests against, increases of rents in mobile home parks. All hearings of the hearing officer shall be open to the public.

D. To conduct such studies, surveys, investigations and public hearings and obtain such information as may be necessary to carry out their duties.

E. Subject to the approval of the city council, to adopt, promulgate, amend and rescind such administrative rules and regulations as the hearing officer finds reasonable and necessary for the conduct of their affairs and to implement and administer the provisions of this chapter.

F. Except where such rules are in direct conflict herewith, the hearing officer shall be subject to the regulations and standards of conduct for city commissioners, committee members, board members and hearing officers as established and amended from time to time by resolution of the city council.

G. To keep records of their proceedings which shall be submitted to the city council and open for inspection by the public.

H. To perform such other duties as may be delegated to the hearing officer by the city council.”
Section 7. Section 9.05.090, “Rent increase based on capital improvements” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.090 Rent increase based on capital improvements.

A petition for a rent increase based on the cost of a completed capital improvement may be filed with the city, in accordance with the following provisions and the rules and regulations:

A. Subject to subsections (B) and (C) of this section, the capital improvement increase petition shall be approved if all of the following findings can be made:

1. The work satisfies the definition of capital improvement set forth in CMC 9.05.030, and in any rules and regulations;

2. Fifty-one percent of the occupied spaces in the park, with one vote per space, have consented to the capital improvement;

3. No prior rent increases have been charged based upon or including the cost of the capital improvement;

4. As required by CMC 9.05.060(G), the park owner is currently registered and current on payment of the required monthly registration fee(s); and

5. All documentation and other information required by this chapter pertinent to the requested rent increase have been provided by the park owner.

B. Notwithstanding subsection (A) of this section, a capital improvement rent increase shall not be granted if the proposed capital improvement rent increase is for any portion or all of a utility distribution system where the utility rates are set by the Public Utilities Commission and the approved rates took into consideration costs of repair, replacement, maintenance, operation and/or capital improvements to the system.

C. A petition which meets all requirements of subsection (A) of this section but

has not been consented to by 51 percent of the occupied spaces may be granted when the capital improvement is necessary to protect the health and safety of the park, its residents, or neighbors as determined in accordance with the rules and regulations.

D. Any rent increase granted under this section shall be amortized over the useful life of the improvement and apportioned equally among all rental spaces in the park by dividing the verified cost of the improvement by its useful life (in years), dividing that result by 12 and further dividing by the number of spaces in the park. Any increase granted under this section shall remain in effect only during the useful life of the improvement. Any such increase shall be included as a separate charge either on the residents’ monthly rent statement or on a separate statement and shall not be included in the space rent for purposes of determining any other future rent increases under this chapter.

E. For purposes of determining the cost of a capital improvement, an interest cost of the lesser of either the current prime rate plus one percent, or the interest rate actually incurred by the mobile home park owner in financing the improvement, may be added.

F. Management may petition the hearing officer for an increase under this section by submittal of a verified petition under penalty of perjury to the city manager. The petition shall state the names, addresses and telephone numbers of all affected residents; the current rent of the affected spaces; the proposed rent increase; the documentation establishing that the resident meeting and capital improvement ballot election were held; the documentation establishing that the capital improvement was made, and the basis for the requested rent increase; and such other information relevant to the petition as determined by the city, in accordance with the rules and regulations. All necessary documents and records to support the petitioner’s calculations shall be attached to and shall become part of the petition. Seven copies of the petition and supporting documentation and records, along with proof of service of the notice required by CMC

9.05.110(D), an electronic copy of the petition and supporting documentation, and two sets of stamped envelopes addressed to each resident, shall be filed with the city manager.

G. Upon receipt of a petition, the city manager shall determine whether the petition is complete, in accordance with the following provisions:

1. No petition shall be deemed complete until all documents supporting the petitioner’s calculations and requested rent increase, required copies of the petition, and all proof of service and posting requirements have been filed with the city manager, and the filing fee paid to the city. The city manager shall have 30 days in which to determine the completeness of the petition, and shall notify the petitioner in writing within that period of any deficiency in the petition and the additional information, documentation or fee necessary for the city manager to deem the petition complete. Procedures for determination whether a petition is complete shall be set forth in the rules and regulations.

2. The documents and records submitted in support of the petition must be legible, reproducible, organized and presented in a manner appropriate and acceptable by reasonable accounting standards. Required documentation to deem the petition complete shall include all documents demonstrating that the resident meeting and resident vote took place, including but not limited to the notice of resident meeting, proof of service of the notice of resident meeting on all residents, the ballot submitted to the residents, and the election results. Required documentation shall also include all documents supporting the capital improvement, including but not limited to all invoices, billings, checks, code violation notices or citations, governmental approvals, documents demonstrating the health and safety reasons for the work if management contends the improvement was necessary for health and safety reasons, and all other records demonstrating the need for the work, the specific work performed, and the cost for such work. Management must, upon request of the city manager, or the hearing officer, show to city staff and/or the hearing officer the original document from which any photocopy was made and all documents, papers, or written memoranda which support or are evidence of claimed expenses of any nature.

3. Failure to comply with the provisions of this subsection shall be good and sufficient cause to deny the petition if the city finds that the park’s failure to submit a complete petition demonstrates that the park owner failed to meet its burden of proof that a capital improvement rent increase is warranted under this section.

H. Concurrently with filing the petition, management shall place two complete copies of the petition in the park office and two complete copies of the petition in the park clubhouse, for inspection and copying by the park residents and their representative(s).

Management shall maintain these copies of the petition, and any modifications or supplemental information or documentation submitted to the city, in those locations until issuance of a final decision by the city on the petition.

I. Management shall serve written notice of the filing of the petition on each resident of a space affected by the petition, in accordance with the requirements of CMC

9.05.110(F). In addition to all other requirements for submittal of the petition, no petition shall be considered as filed until proof of service of such notice and petition is filed with the city manager as required by CMC 9.05.110(F).

J. Written notice of the petition shall be mailed by the city to the affected residents on the date on which the petition is determined to be complete, and shall advise them of their right to submit a written response or protest to the petition, along with all supporting documentation, within 30 days of the date of mailing of the notice.

K. The hearing officer shall commence a public hearing on the petition within 45 days after mailing of the notice to the affected park residents that the petition has been deemed complete, and shall render its decision in writing, including findings of fact, within 75 days after the petition is determined to be complete; provided, that the hearing officer may extend the time limits under this subsection for reasonable cause, and failure of the hearing officer to act within the time limits specified herein shall not result in the automatic approval of any petition. The public hearing shall be conducted in the same manner as and in accordance with the requirements of hearings on petitions under CMC 9.05.110.

The hearing officer may approve the requested increase or a modified increase, or may deny the increase.

L. Management shall also be required to pay a filing fee and deposit the additional costs of the public hearing in accordance with the terms of this subsection.

1. Concurrently with filing the petition for a capital improvement rent increase, management shall pay the initial filing fee established and amended from time to time by resolution of the city council. Notwithstanding subsection (G) of this section or any other provision of this chapter, no petition for a capital improvement rent increase submitted to the city under this section shall be accepted as complete by the city, and no hearing on a petition for capital improvement rent increase shall be set by the city, if management fails to submit the initial filing fee concurrently with the petition, and the failure of management to submit the initial filing fee shall constitute grounds for the city to reject the petition as incomplete and to refuse to further process the petition.

2. Management shall also pay any additional costs of the public hearing not later than 15 days prior to the scheduled public hearing, which such costs shall be based upon an estimate prepared by the city manager and as established and amended by resolution of the city council. Notwithstanding subsection (G) of this section, management’s failure to deposit the additional costs shall be good and sufficient reason for the city to cancel the public hearing and to deem the petition withdrawn by the park owner. The term “costs” shall have the meaning set forth in CMC 9.05.110(H)(2).

3. The initial filing fee and any other costs paid by management may be included in a petition for temporary rent increase pursuant to CMC 9.05.140.

M. Any interested person wishing to respond or object to the petition may do so by filing a written response or protest with the city manager, in accordance with the rules and regulations. The written response or protest shall be filed with the city manager not later than the thirtieth day following the date that notice of the complete petition is mailed to the affected residents. All such responses or protests shall be served on management and proof of such service filed with the city manager in accordance with forms provided by the city, at the time the written response or protest is filed with the city manager.

N. At the conclusion of the public hearing, if the hearing officer finds that all requirements of this chapter have been met and an increase as requested in the petition or as modified by the hearing officer is authorized, the hearing officer shall approve the increase. If the hearing officer is unable to find that all requirements of this chapter have been met, the hearing officer shall deny the increase.

O. Management may but need not submit a petition to the hearing officer for a determination whether a proposed improvement would qualify for a capital improvement increase under this section upon its completion. The determination by the hearing officer shall be limited to the issue of whether the work proposed constitutes a capital improvement and shall not address the amount of the rent increase which would result from completion of the improvement should management prevail on the petition. If an

improvement is determined to qualify as a capital improvement under this section the only issues to be determined when the improvement has been completed and a petition for rent increase received shall be the amount of the increase; provided, that the improvement constructed conforms to the proposed improvement submitted to the hearing officer; and provided, that all required governmental improvements and permits have been obtained. A hearing shall be held on the petition in accordance with CMC

9.05.110.

P. Appeal. Any decision of the hearing officer pursuant to this section may be appealed, and prior to commencing any action in a court of competent jurisdiction shall be appealed, to the city council in accordance with CMC 9.05.120.” Section 8. Section 9.05.100, “Rent increase to provide a reasonable return” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.100 Rent increase to provide a reasonable return.

A. It is the intention of the city council that the permitted annual rent increase shall be sufficient to provide a reasonable return and maintain net operating income to a mobile home park owner. Nevertheless, recognizing the possibility of an extraordinary situation, a mobile home park owner may file a petition with the city manager for a rent increase in addition to that permitted by CMC 9.05.080 and/or 9.05.090 on the ground that it is required to provide a reasonable return to the park in such situations, in accordance with the following criteria. It shall be presumed, in the absence of evidence to the contrary, that the net operating income produced by the mobile home park during the base year provided the mobile home park owner with a reasonable return to the park.

B. For purposes of this chapter, and any rules and regulations, the following definitions and provisions shall apply:

1. “Base year” means as follows:
a. If a park has never obtained approval of a rent increase pursuant to this section (or any predecessor ordinance), the term “base year” means the fiscal year commencing July 1, 1991, and ending June 30, 1992. b. If a park has previously obtained approval of a rent increase pursuant to this section (or any predecessor ordinance), the “base year” for purposes of calculating a subsequent rent increase under this section means the income and expense year which was used by the city as the “current year” in determining the most recently approved rent increase under this section (or any predecessor ordinance). c. If a park applied for a rent increase pursuant to this section (or any predecessor ordinance) which was denied by the city, and the park subsequently applies for another rent increase under this section, the “base year” for purposes of

calculating the subsequent rent increase means the fiscal year commencing July 1, 1991, and ending June 30, 1992.
d. For purposes of a petition filed under subsection (E) of this section, “base year” shall have the meaning set forth in subsection (E)(2) of this section.

2. “Base year CPI” means as follows:
a. If the park has never obtained approval of a rent increase pursuant to this section (or any predecessor ordinance), the “base year CPI” means the CPI reported by the Bureau of Labor Statistics, U.S. Department of Labor, for June 30, 1992, as determined by the city manager.
b. If the park has previously obtained approval of a rent increase pursuant to this section (or any predecessor ordinance), the “base year CPI” for purposes of calculating the subsequent rent increase under this section means the CPI used by the city as the “current year CPI” in determining the most recently approved special rent increase under this section (or any predecessor ordinance). c. The city manager shall be responsible for determining the base year CPI.

3. “Comparable park” means a park in the city and surrounding areas, which has similar quality, number and type of amenities, construction and services, is located in a similar neighborhood and provides similar access and proximity to schools, medical and educational facilities, recreation, entertainment, parks, shopping and other services and amenities and is similarly maintained as the petitioner’s park.

4. “Current CPI” means the CPI last reported as of the date the rent increase petition filed under this section is declared complete. The city manager shall be responsible for determining the current CPI.

5. “Current year” means the 12-month period immediately preceding the date of submittal of a complete petition for a rent increase under this section.

6. “Gross income” for the park includes:
a. Gross rents computed as gross rental income at 100 percent paid occupancy; plus
b. interest earned on rental deposits, unless paid by the mobile home park owner to the residents; plus
c. Revenue from laundry facilities, cleaning fees or services, garage, storage and parking fees; plus
d. All other income or consideration received or receivable for or in connection with use or occupancy of mobile home spaces and related services in the park (but excluding any income or reserves received from submeter discounts or other

income collected for utility services if the charges for such utility services are regulated by the PUC); minus
e. Uncollected rents due to vacancy and bad debts to the extent they are beyond the control of the mobile home park owner. Uncollected rents in excess of three percent of gross rents shall be presumed to be unreasonable unless proven otherwise by a preponderance of the evidence.

7. “Operating expenses” for the park include:
a. Real property taxes and assessments; plus
b. Reasonable management expenses, contracted for or
performed by the mobile home park owner, including necessary and reasonable advertising to ensure occupancy only, accounting, insurance and other managerial expenses including allowable legal expenses as specified in subsection (B)(9) of this section. Management expenses which have not increased by more than the CPI since the base year or which are the same percentage of gross income in the base year and current year are presumed to be reasonable. Such presumption may be rebutted by clear and convincing evidence; plus
c. Reasonable normal repair and maintenance expense, such as painting, normal cleaning, fumigation, landscaping and repair of all standard services, including electrical and plumbing (and excluding expenses for the repair of, maintenance to, or the replacement of any component or meter of any submetered utility distribution system if the utility rates were set by the PUC and took into consideration the cost for operation, repair, replacement and/or maintenance of that type of service), carpentry, furnished appliances, drapes, carpets, furniture, pool, laundry and recreational equipment; plus
d. Owner-performed labor if actually performed by the park owner and the hours and nature of services provided are documented in the petition.

Owner-performed labor shall be compensated at an amount not to exceed the average hourly rate charged for such work within the same industry in the city of Calimesa or the surrounding area, and only upon a satisfactory showing of the date, time and nature of the work performed. Owner-performed labor which has not increased by more than the CPI since the base year or which is the same percentage of gross income in the base year and current year is presumed to be reasonable. Such presumption may be rebutted by clear and convincing evidence; plus
e. Licenses and registration fees required by law to the extent they are not paid by the residents (but excluding licenses and fees charged by state, federal or local governmental agencies related to tax purposes or the form of ownership of the park); plus
f. Capital improvements with a total cost of less than $100.00 per year per benefited space, provided they were not the subject of a city-approved capital improvement increase pursuant to CMC 9.05.090; plus

g. Capital improvements and major repairs with a total cost of more than $100.00 per year per benefited space, provided such costs are amortized on a straight line basis over the life of the improvement, provided the costs thereof were not the basis of a separate capital improvement pursuant to CMC 9.05.090. When the useful life of the improvement exceeds four years, an interest cost of the lesser of either the current prime rate plus one percent, or the interest rate incurred by the mobile home park owner in financing the improvement or repair, may be added. h. Expenses which are substantial, and which do not normally re-occur on an annual basis, shall be amortized over a reasonable period with an interest allowance in accordance with subsection (B)(7)(g) of this section.

8. Operating expenses shall not include:
a. Unnecessary and avoidable expense increases since the base year; and
b. Mortgage principal and interest payments and payments of any underlying ground lease, or any other debt service except as expressly provided in this section; and
c. Any penalties assessed or awarded for violations of this or any other law, including but expressly not limited to the Mobilehome Residency Law (California Civil Code Section 798 et seq.) the Mobile Home Parks Act (Division 13, Part

2.1 of the California Health and Safety Code, commencing with Section 18200), this chapter, or any other city, county, state or federal law; and d. Legal costs and fees except as provided in subsection (B)(9) of this section; and
e. Depreciation of the property; and
f. Any expenses for which the mobile home park owner has been reimbursed by any security deposit, insurance settlement, judgment for damages, or any other method; and
g. Reserve accounts; and
h. Accounting or other similar expert expenses incurred by the park owner in seeking any rent increase under this chapter, including but expressly not limited to any costs incurred in preparing or submitting any petition for a rent increase to the city manager, the hearing officer or the city council; and any costs of the public hearing incurred by the park owner in seeking any rental increase under this chapter; and i. Accounting or other similar expert expenses incurred in judicial or other administrative proceedings involving challenges to this chapter, any decision of the city under this chapter, or the defense of lawsuits or other proceedings brought by residents and/or the city under this chapter; and

j. Any fees, costs, penalties, fines or other expenses of any kind incurred in or as a result of any judicial or administrative proceedings before any federal, state or local agencies relating to or challenging the conditions or maintenance of the park, regardless of whether or not management prevailed in such lawsuit or administrative proceeding; and
k. Any capital improvement for which a capital improvement rent increase has been approved under CMC 9.05.090; and
l. Governmental fees, charges or assessments imposed based on the form of ownership of the park; and
m. Any expenses which resulted due to the owner’s failure to undertake prudent and ongoing maintenance activities or activities required by law; or costs which were caused by unnecessary and unreasonably deferred negligent or otherwise improper repair and/or maintenance or other unreasonable acts or omissions of the park owner, including but expressly not limited to any expenses incurred with regard to vacant spaces. In evaluating an MNOI petition, the hearing officer may reduce allowable operating expenses to the extent that the hearing officer finds that any claimed expenses resulted from management’s failure to undertake prudent and ongoing maintenance activities or which such costs were caused by unnecessarily and unreasonably deferred negligent or otherwise improper repair and/or maintenance or other acts or omissions of management; and
n. Any expenses for which a park owner has obtained approval of a capital improvement rent increase pursuant to CMC 9.05.090.

9. Allowable legal expenses include reasonable attorneys’ fees and costs incurred in successful good faith attempts to recover rents owing and unlawful detainer actions to the extent such fees and costs are not recovered from the defendants; and reasonable attorneys’ fees and costs incurred in connection with matters pertaining to the title or normal operation of the mobile home park. a. Allowable legal expenses in a special rent increase petition shall not include any of the following: attorneys’ fees and costs for proceedings under this chapter (including but not limited to attorneys’ fees and costs incurred in connection with the preparation or submittal of petitions for rent increases to the city under this chapter); attorneys’ fees and costs incurred as a result of any judicial or administrative proceedings before any federal, state or local agency relating to or challenging the conditions or maintenance of the park regardless of whether or not the park owner prevailed in such proceeding; any attorneys’ fees or costs incurred in connection with judicial or other administrative proceedings involving challenges to this chapter, any decision of the city under this chapter, or the defense of lawsuits or other proceedings brought by residents and/or the city under this chapter; any attorneys’ fees, costs or any other payments of any kind made to any organization for the purpose of litigating or challenging rent control; any attorneys’ fees and costs of any kind incurred in connection with any other legal proceedings related to the park; and any other attorneys’ fees and costs that are not related to the normal operations of the park. Legal expenses incurred in connection with preparation of a special rent increase petition and/or the hearing or appeal process

related to a special rent increase petition may be included in a request for a temporary rent increase pursuant to CMC 9.05.140.
b. In determining the amount of legal expenses to be included in base year or current year operating expenses, allowable legal expenses shall be amortized over a five-year period, and only the amortized portion shall be included as an operating expense in the relevant year. For purposes of determining the amortized cost of allowable legal expenses, an interest cost of the lesser of either the current prime rate plus one percent, or the interest rate actually incurred by the mobile home park owner in paying for the expenses, may be added.
c. Except as provided in this subsection (B)(9), no other attorneys’ fees and costs are allowable as operating expenses.

10. “Net operating income” or “NOI” means gross income less operating expenses for the park.

11. “Special increase” or “special rent increase” means any of the following: (a) a maintenance of net operating income rent increase under subsection (D) of this section, (b) a maintenance of net operating income rent increase based on a readjusted base year NOI under subsection (E) of this section, or (c) a fair return rent increase under subsection (F) of this section.

12. Determination of Gross Space Rents. If management submits a petition for a special rent increase under subsection (D) and/or (E) of this section, the space rents actually charged by management in the 12 months preceding the date of filing of the complete petition shall be used to determine the park’s current year gross income, in accordance with the following requirements:
a. Following approval of a permitted annual increase, if management began collecting rents based on the approved permitted annual increase prior to the date of submittal of the complete petition for a special rent increase to the city, the actual space rents collected by management during the current year (as defined in subsection (B)(5) of this section) shall be used in performing the special rent increase calculations under this section and CMC 9.05.110.
b. If management issues a notice of rent increase under state law based upon a city-approved permitted annual rent increase to any resident but the actual initial payment date based on that approved permitted annual increase does not take place prior to the date of filing of the complete petition under this section, the special rent increase approved by the city pursuant to this section shall supersede and take the place of any such noticed annual rent increase. The special rent increase calculations made pursuant to this section and CMC 9.05.110 shall be adjusted to avoid any duplication of rent increases.

C. For purposes of determining a special rent increase under subsection (D) or (E) of this section, the gross income and operating expenses for the entire park shall be determined, including for those spaces which are exempt from rent control under this chapter pursuant to a long-term rental agreement under Civil Code Section 798.17(a) or otherwise exempt under Civil Code Section 798.45. However, in calculating a special rent

increase under subsection (D) or (E) of this section for the regulated spaces, the net operating income of the park shall be adjusted to reflect only that portion of the park that is subject to this chapter, and a prorated amount of the park’s net operating income increase shall be allocated to the individual regulated spaces such that the regulated spaces shall be required to pay only that portion of the maintenance of net operating income rent increase attributable to the regulated spaces. Spaces exempt from rent control shall pay the space rent required pursuant to their individual long-term leases.

D. Maintenance of Net Operating Income Increase (or “MNOI Increase”). A mobile home park owner may petition the hearing officer to increase the park’s base year net operating income by 80 percent of the increase in the Consumer Price Index since June 30, 1992, and the date of the petition. For the purpose of this subsection (D), the June 30, 1992, Consumer Price Index shall be the “base year CPI” as defined in subsection (B)(2)(a) of this section; and “current CPI” shall be the “current CPI” as defined in subsection (B)(4) of this section. The petition shall be filed in accordance with this section, CMC 9.05.110 and the rules and regulations.

E. Adjustment to Base Year NOI.

1. A mobile home park owner may rebut the presumption that the park’s base year net operating income provided a just and reasonable return at that time by presenting evidence that:
a. The park’s operating expenses in the base year were
unusually high or low. In such instances, the hearing officer may adjust the calculation of base year NOI by adjusting the expenses to reflect the average of the park’s expenses over a reasonable period of time or the average of expenses in comparable mobile home parks in that year.
b. Capital improvements were made during the base year, but were not reflected in increases collected during that year. c. Unusual repairs were made in the base year due to damage caused by uninsured natural events or vandalism.
d. Other expenses were unreasonably high or low
notwithstanding prudent business practices.
e. The rent during the base year was lower than rents being charged in comparable mobile home parks in the city and comparable parks in the surrounding areas due to the fact that it was not established in an arms-length transaction, rent had not been increased during that year or other peculiar circumstances. f. The rent during the base year was lower than rents being charged for spaces in comparable mobile home parks in the city and comparable parks in the surrounding areas.
g. The rent during the base year was not sufficient to provide a just and reasonable return by providing evidence of the return on investment actually

earned by the park in the base year and of the return on investment earned by comparable parks in the city and surrounding areas since the base year.

2. Base Year. For purposes of this subsection (E), “base year” means the fiscal year commencing July 1, 1991, and ending June 30, 1992.

3. Eligibility. If a park has previously received approval of a special rent increase under this subsection (E) (or any predecessor ordinance), such park shall not be eligible for another special rent increase pursuant to this subsection (E).

4. Burden of Proof. The mobile home park owner shall have the burden of proving that one or more of the circumstances listed above existed and of providing the evidence needed to make appropriate increases in base year income and expenses.

5. Procedures and Requirements. The petition shall be filed in accordance with CMC 9.05.110 and the rules and regulations.

F. Fair Return Increase.

1. A park owner may rebut the presumption that the MNOI calculations provided in subsection (D) of this section and/or the modified calculations provided in subsection (E) of this section are sufficient to provide a just and reasonable return by presenting evidence that the rate of return being earned by the mobile home park is not just and reasonable.

2. Burden of Proof. The park owner shall have the burden of proving the park is not earning a just and reasonable return.

3. Procedures and Requirements. A petition for rent increase under this subsection (F) shall be in accordance with CMC 9.05.110 and the rules and regulations.

G. Registration Fee. As required by CMC 9.05.060(G), no petition for a special rent increase shall be approved by the city if the park owner is not currently registered and current on payment of his/her monthly registration fee(s) due under CMC 9.05.060.” Section 9. Section 9.05.110, “Petition for rent increase to provide a reasonable return” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.110 Petition for rent increase to provide a reasonable return.

Petitions for a special rent increase to provide a reasonable return under CMC

9.05.100 shall be submitted in accordance with the following requirements and the rules and regulations:

A. Management shall file a verified petition under penalty of perjury with the city manager for a special rent increase to provide a reasonable return and to maintain

net operating income pursuant to CMC 9.05.100(D), (E) or (F). Concurrently with filing the petition, management shall pay the required filing fee adopted or periodically adjusted by resolution of the city council.

B. A petition for an MNOI rent increase under CMC 9.05.100(D) may be filed by itself or concurrently with a petition for a special rent increase under CMC 9.05.100(E) or (F). A petition for an MNOI rent increase based on a readjusted base year NOI under CMC 9.05.100(E) may be filed with a petition for a special rent increase under CMC

9.05.100(D) or (F). A petition for a special rent increase under CMC 9.05.100(F) shall not be filed unless accompanied by a petition for a special rent increase under CMC

9.05.100(D) or (E).

C. The petition shall state the names, addresses and telephone numbers of all affected residents; the current rent of the affected spaces; the proposed increase; the calculations pursuant to CMC 9.05.100 to support the proposed increase and a request to the hearing officer to review and approve the proposed increase; and such other information relevant to the petition as determined by the city in accordance with the rules and regulations. All necessary documents and records to support the petitioner’s calculations shall be attached to and shall become part of the petition. Seven copies of the petition and supporting documentation and records, an electronic copy of the petition, proof of service of the notice required by subsection (E) of this section, and two sets of stamped envelopes addressed to the affected residents shall be filed with the city manager.

D. Upon receipt of the petition, the city manager shall determine if the petition is complete, in accordance with the following provisions and the rules and regulations:

1. No petition shall be deemed complete until all documents supporting the petitioner’s calculations and requested rent increase, required copies of the petition, and all proof of service and posting requirements have been filed with the city manager and the filing fee paid to the city, as required by this section. The city manager shall have 30 days in which to determine the completeness of the petition, and shall notify the park owner in writing within that period of any deficiency in the petition and the additional documentation, information and/or fee necessary for the city manager to deem the petition complete. Procedures for determination whether a petition is complete shall be set forth in the rules and regulations. The park owner shall comply with any requests by the city manager for submittal of additional information or documentation deemed necessary by the city manager to find that the petition is complete, in accordance with the rules and regulations.

2. The applicable subsection under which the petition is submitted, the method or manner of determining the proposed rent increase, and the documents and records submitted in support of the petition must be legible, reproducible, organized and presented in a manner appropriate and acceptable by reasonable accounting standards and must be consistent with the requirements of this section and the rules and regulations.

Required documentation to deem the petition complete shall include all documentation that establishes each category, type and amount of income, expense, interest charged or

incurred, and the reasonableness of each expense, in accordance with the rules and regulations. The petitioner must, upon request of the hearing officer, , show to the hearing officer the original document from which any photocopy was made and all documents, papers, or written memoranda which support or are evidence of claimed income or expenses of any nature, or which are otherwise pertinent to the hearing officer’s decision on the petition.

3. Failure to comply with the provisions of this subsection shall be good and sufficient cause to deny the petition if the hearing officer finds that the park’s failure to submit a complete petition demonstrates that the park owner failed to meet its burden of proof that a rent increase is warranted under this section.

E. Concurrently with filing the petition, management shall place two complete copies of the petition in the park office and two complete copies of the petition in the park clubhouse for inspection and copying by the park residents and their representative(s).

Management shall maintain these copies of the petition, and any modifications or supplemental information or documentation submitted to the city, in those locations until issuance of a final decision by the city on the petition. Management shall also post a notice in the park office and clubhouse, in publicly accessible areas, informing the residents that the petition has been filed with the city, in accordance with the rules and regulations, and shall maintain such notices in the park until issuance of a final decision by the city on the petition.

F. Management shall serve written notice of the filing of the petition on each resident of a space affected by the petition. The notice shall also advise the residents that copies of the petition and supporting documentation are available for their review and copying at the specified locations in the park; and that the petition and supporting documentation may be reviewed at City Hall. Management shall also serve a copy of the petition and all supporting documentation and records on the designated representatives of the park residents. The representatives shall be selected by the park residents and shall not exceed four persons. Service of the notice and petition may either be in person or by mail to the last known address of each resident and representative. No petition shall be considered as filed until proof of service of such notice and petition is filed with the city manager. The notice and proof of service shall be on forms provided by the city manager.

G. Written notice of the petition shall be mailed by the city to the affected residents on the date on which the petition is determined to be complete, and shall advise them of their right to submit a written response or protest, along with all supporting documentation, to the petition within 30 days of the date of mailing of the notice. The hearing officer shall call a meeting to commence a public hearing within 75 days after the petition has been deemed complete by the city. The city clerk shall publish notice of the public hearing at least 72 hours prior thereto. The hearing officer shall render its decision, in writing, including findings of fact and rulings on all issues presented, within 90 days after the petition is determined to be complete; provided, that the hearing officer may extend the time limits under this subsection for reasonable cause, and failure of the hearing officer to act within the time limits specified herein shall not result in the automatic approval of any petition.

H. The park owner shall also be required to pay a filing fee and deposit the additional costs of the public hearing in accordance with this subsection.

1. Concurrently with filing the petition for a special rent increase, management shall pay the initial filing fee established and amended from time to time by resolution of the city council. Notwithstanding subsection (D) of this section or any other provision of this chapter, no petition for a special rent increase submitted to the city under this section shall be accepted as complete by the city, and no hearing on a special rent increase petition shall be set by the city, if management fails to submit the initial filing fee with the petition, and the failure of management to pay the initial filing fee shall constitute grounds for the city to reject the petition as incomplete and to refuse to further process the petition.

2. Management shall also pay any additional costs of the public hearing, based upon an estimate prepared by the city manager in accordance with the resolution established or amended from time to time by the city council. The estimated costs of the public hearing shall be deposited with the city manager no less than 60 days prior to the hearing. Failure to deposit the costs shall be good and sufficient reason for the city to cancel the hearing and to deem the petition withdrawn by the park owner, and no further action to process the petition shall be taken by the city. As used in this subsection, the term “costs” means all city staff and other expert time incurred by the city in reviewing the petition and presenting the petition to the hearing officer and city council; copying and duplication costs; and costs of providing public notice. Costs shall be established and periodically adjusted by resolution of the city council.

3. The initial filing fee, and any additional costs deposited by management, may be included in a petition for a temporary rent increase pursuant to CMC 9.05.140.

I. Any resident or other interested person wishing to protest or respond to the petition may do so by filing a written protest under penalty of perjury with the city manager, in accordance with the rules and regulations. The written protest shall be filed with the city manager not later than the thirtieth day following the date that notice of the complete petition is mailed to the affected residents. All such protests shall be served on management and proof of such service filed with the city manager, on forms provided by the city, at the time the written protest is filed with the city manager.

J. In seeking a rent increase under any provision of this chapter, the petitioner shall bear the burden of proof. All parties to the public hearing may have assistance in presenting evidence and developing their position from legal counsel, residents, resident or park owner organizations, or experts designated by such parties. In the event that the city retains a certified public accountant or other expert as a designated representative of the hearing officer to examine the petition and supporting material and testify as an expert witness, the cost to the city to employ such an expert shall be a part of the cost of the public hearing. Any and all expenses shall be reasonable.

K. At the conclusion of the public hearing, if the hearing officer finds that an increase as requested in the petition or as modified by the hearing officer is authorized

by CMC 9.05.100, the hearing officer shall approve the increase as proposed or modified.

If the hearing officer finds an increase is not authorized under CMC 9.05.100, the hearing officer shall deny the increase. The hearing officer’s decision shall be issued in accordance with subsection (G) of this section. The mobile home park owner shall not be permitted more than one increase under CMC 9.05.100 in any 12-month period.

L. Upon issuance of the final decision by the hearing officer, the city clerk shall mail, by first class mail, postage prepaid, a copy of the decision of the hearing officer to the park owner and to each park resident, along with an affidavit of mailing. The hearing officer’s decision shall be final upon date of mailing of the resolution in accordance with this subsection.”
Section 10. Section 9.05.120, “Appeal” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.120 Appeal.

A. Either party may, and prior to commencing any action in a court of competent jurisdiction shall, appeal any final decision or order of the hearing officer to the city council by filing written notice of the appeal with the city manager not later than 15 days after the date of deposit in the mail of the decision of the hearing officer to the petitioner and affected residents. Appeals shall be filed, processed and heard in accordance with this section and the rules and regulations.

B. Prior to or concurrently with filing the appeal, management shall place copies of the appeal at the park in accordance with CMC 9.05.110(E), and shall maintain those copies at the park for inspection and copying by the residents until issuance of a final decision by the city on the appeal.

C. The appellant shall serve written notice of the filing of the appeal, along with any documents supporting the appeal, on the opposing party, and prior to or concurrently with filing of the appeal shall also post notice of filing of the appeal in the park clubhouse and office in publicly accessible areas. If the appellant is a park resident (or park resident representative), notice shall be posted in those areas normally made available for posting of notices by park residents. If the appellant is the park owner, the notice shall also advise the residents and the resident representatives that copies of the appeal and supporting documentation are available for their review and copying at the park in accordance with CMC 9.05.110(E), and that the appeal and supporting documentation may be reviewed at City Hall. Service of notice may either be in person or by mail to the last known address of the opposing party. No appeal shall be considered as filed until proof of service of such notice and posting, and supporting documentation, are filed with the city manager, and the cost of the appeal is deposited with the city manager. The cost of the appeal shall be estimated by the city manager. The notice and proof of service and posting shall be on forms provided by the city manager. The city manager shall set the appeal for a public hearing at a regular meeting of the city council to be commenced within 30 days after the appeal is filed. No appeal shall be considered filed until proof of service of such notice,

supporting documentation and deposit are filed with the city manager. If the appellant fails to deposit the required fee and all required documentation by the deadline to file an appeal, the appeal shall be deemed withdrawn and no further proceedings shall take place on the appeal.

D. Upon receipt of the complete appeal, the city manager shall provide notice of the appeal hearing to all affected park residents, resident representatives, management and management’s representative(s), in accordance with the rules and regulations.

E. As used in this section, the term “costs” means all city staff and other expert time incurred by the city in reviewing the appeal and presenting the appeal to the city council; copying and duplication costs; and costs of providing public notice. The costs shall be set by resolution of the city council as established or amended from time to time.

F. The city council shall affirm the hearing officer’s decision if it is supported by substantial evidence, and complies with this chapter and rules and regulations. If the city council finds that the hearing officer’s decision is not supported by substantial evidence, or does not comply with the rules and regulations, the city council shall grant the appeal, and may deny the petition, modify the hearing officer’s decision on the petition, or refer the petition back to the hearing officer for further proceedings consistent with the city council’s decision on the appeal.

G. The appeal hearing shall be conducted in accordance with the rules and regulations. The city council shall issue its decision in writing, including findings of fact and rulings on all issues presented, within 45 days of the commencement of the public hearing; provided, that the city council may extend the time limits under this subsection for reasonable cause, and failure of the city council to act within the time limit specified herein shall not result in the automatic approval of any petition. The decision of the city council on any appeal shall be final.

H. Upon issuance of the city council’s decision pursuant to subsection (G) of this section, the city clerk shall mail, by first class mail, postage prepaid, a copy of the resolution of the city council setting forth its final decision on the appeal, to the park owner and to each park resident, along with an affidavit of mailing. The decision of the city council shall be final on the date of mailing by the city clerk pursuant to this subsection.” Section 11. Section 9.05.140, “Prevailing park owner petition for recovery of petition costs incurred before the board in connection with special rent increase petition” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.140 Prevailing park owner petition for recovery of petition costs incurred before the hearing officer in connection with special rent increase petition.

A park owner who obtains approval of a capital improvement rent increase or

special rent increase from the city may seek approval of a temporary rent increase to reimburse the park owner for the reasonable cost of professional services actually incurred by the park owner in preparing and presenting the petition to the hearing officer under CMC 9.05.110 in accordance with this section and the rules and regulations.

A. A request for approval of a temporary rent increase under this section shall be filed as part of a park owner’s petition for a capital improvement rent increase under CMC 9.05.090(F) or a park owner’s petition for a special rent increase pursuant to CMC

9.05.100 and 9.05.110, in accordance with the city-approved forms. The hearing officer shall consider the park owner’s request at the public hearing at which the underlying petition for a capital improvement rent increase or the underlying petition for special rent increase is considered, and the hearing officer’s decision on the temporary rent increase shall be included in its written decision on the petition for a capital improvement rent increase or special rent increase. Any appeal of the hearing officer’s decision on a temporary rent increase shall be filed in accordance with CMC 9.05.120 in accordance with the city-approved form, and the city council shall consider such appeal concurrently with the appeal of the hearing officer’s decision on the underlying capital improvement rent increase petition or special rent increase petition.

B. The park owner shall bear the burden of proof and shall provide the evidence to justify a temporary rent increase submitted under this section, and approval of the petition shall be conditioned upon the park owner’s successfully obtaining final approval from the city of a capital improvement rent increase pursuant to CMC 9.05.090 or a special rent increase pursuant to CMC 9.05.100 and 9.05.110.

C. Any temporary rent increase granted by the city shall be amortized over a five-year period with interest at the rate of seven percent per year, compounded monthly, and any increase granted shall remain in effect only during the five-year period. Any such increase shall not be included as part of the monthly space rent but shall be itemized as a separate charge either on each resident’s monthly rent statement or on a separate statement. Nothing in this provision shall preclude a park resident from paying the full amount of the temporary rent increase as one lump sum without any payment of interest, following issuance of the city’s final decision.

D. Registration Fee. As required by CMC 9.05.060(G), no petition for a temporary rent increase shall be approved by the city if the park owner is not currently registered and not current on payment of his/her monthly registration fee(s) due under CMC 9.05.060.”
Section 12. Section 9.05.180, “Administrative costs” of Chapter 9.05, “Mobile Home Rent Stabilization” of Title 9, “Public Peace, Morals and Welfare” of the Calimesa Municipal Code is hereby amended in its entirety to read as follows:
“9.05.180 Administrative costs.

The city manager shall, from time to time, calculate the total costs of conducting a meeting of the mobile home rent stabilization hearing officer and appeal to the city council

and file such figures in his/her office. Such figures shall be used in determining the deposits and costs for holding a hearing by the hearing officer and appeal to the city council.”
Section 13. Environmental Determination. This Ordinance has been reviewed with respect to applicability of the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the “Guidelines”). The City has determined that this Ordinance is not a “project” for purposes of CEQA, as that term is defined by Guidelines Section 15378. Specifically, this Ordinance constitutes organizational or administrative activities of City government that will not result in direct or indirect physical changes in the environment. (Guidelines Section 15378(b)(5)). Therefore, because it is not a “project,” this Ordinance is not subject to CEQA’s requirements. Further, even if this Ordinance were deemed a “project” and therefore subject to CEQA, the Ordinance would be covered by the general rule that CEQA applies only to projects that have the potential to cause a significant effect on the environment. (Guidelines Section 15061(b)(3)). As an organizational or administrative activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, this Ordinance does not have the potential to cause a significant effect on the environment and is therefore exempt under this general rule. Further, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and thus this Ordinance is not subject to CEQA. (Guidelines Section 15061(b)(3)).

Section 14. Severability. If any portion of this Ordinance is found to be unconstitutional or invalid, the City Council hereby declares that it would have enacted the remainder of this Ordinance regardless of the absence of any such invalid part or portion. The City Council of the City of Calimesa hereby declares that it would have passed this ordinance, and each section, subsection, clause or phase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional.

Section 15. No Other Amendments. Except as otherwise amended in this Ordinance, the remaining provisions of Chapter 9.05 shall remain as written and in full force and effect.

Section 16. Savings Clause. Neither the adoption of this Ordinance nor the repeal or amendment by this Ordinance of any ordinance or part or portion of any ordinance previously in effect in the City or within the territory comprising the City, shall in any manner affect the prosecution for the violation of any ordinance, which violation was committed prior to the effective date of this Ordinance, nor be construed as a waiver of any license, fee or penalty or the penal provisions applicable to any violation of such ordinances.

Section 17. Effective Date. This Ordinance shall take effect thirty (30) days after its final passage.

Section 18. Publication. The City Clerk shall certify to the adoption of this Ordinance and is hereby directed to cause the following summary of this ordinance to be published and posted as required by law.

INTRODUCED AND PASSED UPON FIRST READING by title only, this 21st day of April 2025, upon the following vote:

AYES: Cervantez, Cundieff, Garcia, Manly and Molina
NOES: None
ABSENT: None
ABSTAIN: None
PASSED, APPROVED AND ADOPTED this 5
th day of May 2025 upon the
following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
________________________________

LINDA MOLINA, MAYOR
ATTEST:
_________________________________

DARLENE GERDES, CITY CLERK
APPROVED AS TO FORM:
__________________________________
STEVEN L. FLOWER, CITY ATTORNEY

City Council Meeting
Agenda Report
Agenda Item No. 6
SUBJECT: RESOLUTION OF OPPOSITION TO SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT’S PROPOSED AMENDED RULES 1111
AND 1121
MEETING DATE: May 5, 2025
PREPARED BY: Will Kolbow, City Manager
RECOMMENDATION: That the City Council adopt Resolution 2025-15, A Resolution of the City of Calimesa, California Opposing the South Coast Air Quality Management District’s Proposed Amended Rules 1111 and 1121.

DISCUSSION: The South Coast Air Quality Management District’s (AQMD) Proposed Amended Rules (PAR) 1111 and 1121 seek to reduce nitrogen oxide (NOx) emissions by transitioning residential furnaces and water heaters to zero-emission alternatives, impacting local governments, homeowners, and businesses. While the rules aim to improve air quality, stakeholders have raised concerns about affordability, technological readiness, and the feasibility of implementation.

Attached to this staff report are a fact sheet and presentation on the PAR prepared by AQMD, and a fact sheet prepared by the Cost of Living Council in opposition to the PAR. Below are various advantages and challenges and concerns on the PAR:

Advantages of PAR 1111 and 1121
• Environmental and Health Benefits: Implementing these rules is projected to reduce NOx emissions by approximately nine tons per day, contributing significantly to improved air quality in the region. This reduction is expected to prevent around 4,000 premature deaths, 16,000 new asthma cases, and 4,000 emergency room visits annually. • Alignment with AQMP Goals: The amendments support the 2022 AQMP's target of a 67% reduction in NOx emissions by the year 2037, facilitating compliance with federal air quality standards.
• Incentive Programs: AQMD has developed the "Go Zero" rebate program, allocating $21M to assist residents and small businesses in transitioning to zero-emission appliances, thereby offsetting some of the associated costs.

Challenges and Concerns
• Economic Impact: Stakeholders have expressed concerns that the financial burden of replacing existing appliances with zero-emission units could disproportionately affect lowincome households and small businesses. The costs associated with purchasing new appliances, potential electrical panel upgrades, and installation may be prohibitive for many.

• Technological Feasibility: Industry experts have highlighted potential challenges regarding the availability and maturity of zero-emission appliances suitable for retrofitting older buildings. There are concerns about whether current technologies can meet the diverse needs of consumers without causing project delays and increased costs. • Implementation Timeline: The proposed timeline for compliance has been criticized as aggressive, potentially leading to supply chain issues and inflated prices. Stakeholders have suggested that a more extended timeline would allow for a smoother transition and better market adaptation.
• Opposition from Local Governments: Several local governments and councils of governments have formally opposed the proposed amendments, highlighting concerns about high implementation costs and minimal air quality benefits.

After consideration of the above, staff recommends that the City Council consider adoption of a Resolution opposing PAR 1111 and 1121 in their current form. The primary reasons for opposition include the significant economic burden on residents and small businesses, technological feasibility concerns, and the potentially unrealistic implementation timeline. While the environmental and health objectives are commendable, it is crucial to balance these goals with the economic realities and practical constraints faced by the community. A more measured approach, incorporating extended timelines, increased financial incentives, and pilot programs to assess technological readiness, may achieve the desired environmental benefits without imposing undue hardship on stakeholders.

FISCAL IMPACT: None.

ATTACHMENTS:

Attachment A: Resolution 2025-15
Attachment B: AQMD Fact Sheet
Attachment C: AQMD Presentation
Attachment D: Cost of Living Council Fact Sheet

RESOLUTION NO. 2025-15

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALIMESA,

CALIFORNIA OPPOSING THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT’S PROPOSED AMENDED RULES 1111 AND 1121
WHEREAS, the South Coast Air Quality Management District (SCAQMD) has proposed amendments to Rules 1111 and 1121 to require a transition to zero-emission residential furnaces and water heaters in an effort to reduce nitrogen oxide (NOx) emissions; and
WHEREAS, the City of Calimesa recognizes the importance of improving air quality and reducing emissions to meet state and federal environmental goals; and WHEREAS, the proposed amendments would place significant financial burdens on homeowners, businesses, and local governments due to the high costs of new appliances, infrastructure upgrades, and installation requirements; and WHEREAS, there are concerns regarding the technological readiness of zeroemission heating appliances, particularly in existing housing stock where retrofitting may be costly or infeasible; and
WHEREAS, the proposed implementation timeline may not allow sufficient time for communities, manufacturers, and contractors to transition effectively, potentially leading to supply chain challenges and increased costs; and WHEREAS, several cities, councils of governments, and industry stakeholders have expressed opposition to the proposed amendments due to their economic and logistical challenges; and
WHEREAS, the City of Calimesa supports a more measured approach that balances air quality improvements with economic feasibility, technological advancements, and equitable implementation strategies.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CALIMESA DOES HEREBY RESOLVE THAT IT OPPOSES SCAQMD’S PROPOSED AMENDED RULES 1111 AND 1121 IN THEIR CURRENT FORM AND URGES SCAQMD TO

CONSIDER ALTERNATIVE APPROACHES THAT MINIMIZE NEGATIVE IMPACTS ON LOCAL GOVERNMENTS, BUSINESS, AND RESIDENTS.

PASSED, APPROVED AND ADOPTED this 5
th day of May, 2025.
_____________________________________

LINDA MOLINA, MAYOR
ATTEST:
_________________________________________

DARLENE GERDES, CITY CLERK

South Coast AQMD is Conducting
Rulemaking that Could Impact Your Home
Water Heaters and Furnaces
How Will the Rules Impact You?
Will Financial Assistance
be Available?
Rules will take effect in 2-5 years and will be
required only when:

Existing appliances
break
Appliances are
voluntarily replaced
Will There be any Flexibility?
Exceptions will be allowed for:

South Coast AQMD is working on an
incentive program to provide rebates
for residents, building owners and small
businesses.

Health Benefits
4,000 premature deaths
16,000 cases of newly onset asthma
4,000 emergency room visits
Want to provide feedback on the rules or need more information? Join a working group meeting.

More information can be found at: www.aqmd.gov/home/rules-compliance/rules. To receive future updates on rulemaking and incentives via email newsletter: Subscribe by checking the “Building Appliances” box located under Rule Updates: www.aqmd.gov/sign-up.

Get Involved
Once implemented, these rules will prevent:

The rules will reduce emissions from residential furnaces (Rule 1111) and water heaters (Rule 1121) by transitioning to zero-emission appliances.

South Coast Air Quality Management District @SouthCoastAQMD 21865 Copley Dr. Diamond Bar, CA 91765
www.aqmd.gov • 1-800-CUT-SMOG©
More
info
Construction or utility
upgrades delays
buildings
Owners of multifamily
Considering other
circumstances
High-altitude areas
V.1

372
Proposed Amended Rule 1111 –
Reduction Of NOx Emissions From Natural
Gas-Fired Furnaces
Proposed Amended Rule 1121 –
Reduction of NOx Emissions From
Residential-Type, Natural Gas-Fired Water
Heaters
Working Group Meeting #8
February 13, 2025
2:00 PM – 4:00 PM (PT)
Join Zoom Meeting:
https://scaqmd.zoom.us/j/97271436016
Meeting ID: 972 7143 6016

374
Agenda
Background
Concerns on
Previous
Proposals
New Concept
Go Zero Rebate
Program
Development
2

375
Summary of Working Group Meeting #7
Enhanced Outreach Efforts
Key Comments received from stakeholders
Updates to Cost-Effectiveness Calculations
Replacement Cost Examples
Updates to Proposed Rule Language
Go Zero Rebate Program Development
• In Working Group Meeting #7, staff presented:
3

376
Actions Taken Since Working Group Meeting #7
• Presented proposed rules to further promote
public awareness
• Councils of Government (Orange County/San
Bernardino)
•Industry, Manufacturing, Trade, and
Community Organizations
• Presented to Stationary Source Committee on
December 20th
• Developed proposed rule outreach materials
• Met with stakeholders for concerns and input
• Reviewed and evaluated public comments
• Considered new rule concepts
4

377
South Coast AQMD is the government agency responsible for air quality in the greater Southern California region
The 2022 Air Quality Management Plan (AQMP) proposes 67% reduction in NOx emission over baseline levels by 2037
• Includes three control measures that require evaluating feasibility of zero-emission technologies for space and water heating
Proposed rules for space and water heating needed to implement 2022 AQMP • Rulemaking process initiated in September 2023
• Conducted seven Working Group Meetings and a Public Workshop • Presented to the Stationary Source Committee in October and December 2024 Background
5

378
6 Estimated NOx Emission Reductions
• Combined space and water heating rules will achieve more NOx emission reductions than any of the recently amended rule for the REgional CLean Air Incentives Market (RECLAIM) sunset • Total RECLAIM reductions for all 14 landing rules combined = 13.6 tons per day • Change of scope to space heating rule (discussed in slide 9) will reduce potential emission reductions Revised
0 1 2 3 4 5 6 7 8 9
Misc Combustion Sources
Electricity Generating Facilities
Gas Turbines
Small Boilers and Process Heaters
Refinery Equipment
Space and Water Heating

379
Original Rule Concept
New Residential Structures
• Require zero-emission appliances California building code already requires zero-ready starting 2026
Existing Residential Structures
• Require replaced appliances to meet zero-NOx-emissions standard beginning in 2029 when:
• The consumer chooses to replace, or
• The equipment needs to be replaced
• Staff proposed alternative compliance options for certain situations • Emergency replacements
• Stranded asset from newer AC unit
• Multifamily buildings
• Installations in high altitude regions
7

380
Key Comments Overview
• Over 250 comment letters received since Public
Workshop on October 3, 2024 • ~20% letters supported the rule concept • ~70% letter opposed the rule concept, including cities and Councils of Governments
• ~10% raised concerns and provided feedback
• Key comments include: • Affordability, especially for low -income
• Lack of consumer choice if rule mandates a
complete conversion to zero-emission technologies
• Concerns about zero-emission technology readiness
• Concerns about electricity demand and grid
sustainability
• Proposed rules will impact small units in schools
and businesses
8

381
Applicability
• Rules apply to appliances based on size (e.g., rated heat input capacity)
• PAR 1121 (water heating) applies to natural gas-fired units less than 75,000 Btu/hr
• Most installed in single family homes with some in-unit multifamily buildings
• Generally, tank-type water heaters of up to 75 gallons • Schools with larger water heaters are not regulated by this rule • Initially PAR 1111 (space heating), proposed to expand applicability from 175,000 Btu/hr to 2 million Btu/hr
• Staff recommending to revise proposal to keep current applicability (up to 175,000 Btu/hr)
• Includes units at residential and commercial buildings (up to ~5,000 square foot space)
• Will address units up to 2 million Btu/hr in future rulemaking 9 Revised

382
Considerations to Address Concerns with Residential Appliance Rules
• Set compliance goals to allow manufacturers to sell a certain percentage of NOx emitting units (e.g. gas) and reduce percentage over time with mitigation fee • Alternative compliance option in lieu of meeting compliance date for all sales Establish a Zero-Emission Manufacturer Alternative
Compliance Option
• 20 - 30 percent of furnaces are zero-emissions*
• 20 - 30 percent of water heaters are zero-emissions** Staff used Energy Information Administration (EIA) estimated 2020 appliance use in California to establish compliance goal * https://www.eia.gov/consumption/residential/data/2020/state/pdf/State%20Space%20Heating%20Fuels.pdf ** https://www.eia.gov/consumption/residential/data/2020/state/pdf/State%20Water%20Heating.pdf 10

383
Potential Building Appliance Targets and Effective Dates Target
Dates* 2027-2028 2029-2032 2033-2035 2036 and after
NOx
Emitting
Units
(e.g. gas)
70% 50% 25% 10%
ZeroEmission
Units
30% 50% 75% 90%
* Could propose different target for space and water heater appliances 11

384
Implementation Approach
Who is Subject?
• All manufacturers who sell gas units subject to Rule 1111 and 1121 (~10 in total) • No requirements for manufacturers who only sell zero-emission appliances, not subject to rules
What is required*?
• Manufacturers submit annual reports after the end year • Report gas and zero-emission appliance sales starting February 20302028 • Sales data will be used to estimate the percent sales • Pay mitigation fees for gas units
Staff meeting with each manufacturer to discuss their implementation * Considering if we should include any requirements on OEM before start of compliance period 12 Revised

385
Proposed Mitigation Fee
• Proposing alternative compliance option for manufacturers combined with mitigation fees • Fee will partially mitigate emission forgone from the alternative compliance option • Provide a revenue stream for Go Zero incentive program • Manufacturers previously paid $150 - $450 mitigation fee per 40 ng/J gas furnace • Proposing nominal fee to incentivize transition to zero-emission technologies without putting undue financial burden on homeowners
Mitigation fee for all gas units sold after 2027
• $100/gas furnace
• $50/gas water heater
• $500 mitigation fee for each units sold over target*
• Discounted fee if zero-emission goal exceeded
* Considering increasing fee over time
13

386
Estimated Emissions Reductions for Revised Concept
NOx Reductions
(tons per day) 2031 2032 2037 2054 2060
Original Proposal (New
2026/Existing 2029) 1.4 1.9 4.2 10.0 10.0
New Concept
(Manufacturer Alternative
and Scope Change*)

1.0 0.7 1.2 0.9 2.9 2.1 7.3 5.0 9.0 6.1
• Implementation of revised concept will result in a slower transition to zeroemission units • Slightly less emission reductions at full implementation • Potentially more incentives available in early years to support transition to zero-emission
14 * Not expanding space heating rule applicability changes potential emission reductions by ~3 tons per day Revised

387
How the New Rule Concept Addresses Concerns
Affordability, especially for low-income residents
• Individual decision as gas units will still be available Lack of consumer choice
• Homeowners will have a choice to purchase gas unit or zero-emission unit Concerns about zero-emission technology readiness
• Slower transition to zero-emission allows more technology development Concerns about electricity demand and grid sustainability • Slower transition will slow demand increase and time to meet future demand 15

388
Other Benefits to New Proposed Rule Concept Addresses
Concerns
Simplifies the proposed rules,
removes other alternative
compliance options
•Original concept put more
responsibility on the installer
• Request delays for
construction
•Notify for emergency
replacements
Mitigation fee will help fund
Go Zero
• Provides funding source
• Longer life of the program
• Focus on low-income
residents
16

389
Go Zero Rebate
Program
Development

390
South Coast AQMD Go Zero Pilot Incentive Program
Incentives are critical to an equitable transition
to zero-emission appliances
• Heat pump rebates for space and water heating
• $21 million funding for the pilot phase
• 75% of funding allocated to overburdened
communities
• Higher rebates for overburdened communities
• Potentially future phases to implement lessons
learned
• Potentially fivefold increase in future funding
The pilot program will include:

Program launch anticipated early 2025
Single Family
$9 million
Installer Training
$1 million
Outreach
and Application Assistance
$1 million
Small Business
$5 million
Multifamily
$5 million

18 391
Rebate Program Incentives
Single Family Resident
Rebate:
$1,000 - $3,000
per unit*
Multi-Family Resident
Rebate:
$1,000 - $4,000
per unit, up to
$300,000 cap*
Small Business Rebate:
$4,000 per unit
* Higher rebates for overburdened communities
South Coast AQMD Go Zero Pilot Incentive Program

19 392
Training will familiarize
installers with plumbing,
HVAC, and electrical work
needed to install heat pumps
Contractor selected based on
prior experience and training
proposal to maximize
installer benefits
Installer Training
Outreach to overburdened
communities to provide
application assistance and
stack other incentives
Contractor will disburse
funding to reach the fourcounty jurisdiction
Outreach and Application Assistance
South Coast AQMD Go Zero Pilot Incentive Program

20 393
Next Steps

394
Next Steps
February 21, 2025
Update Stationary Source Committee with New Concept
March 2025
Release revised preliminary rule language and conduct
more meetings
April 1, 2025
Release draft PAR 1111/1121 and draft supporting
documents
May 2, 2025 (subject to change)
Public Hearing
22

395
▪ To receive newsletter updates via email for
notifications regarding Go Zero, 1111 and 1121
rule development, or other forthcoming building
appliances rules, please subscribe by checking
the Go Zero, Rule 1111, Rule 1121, or Building
Appliances check boxes located under Rule
Updates:
http://www.aqmd.gov/sign-up
▪ Visit our newly redesigned Residential Building
Appliance Clearinghouse Webpage:
https://www.aqmd.gov/home/rules-
compliance/residential-and-commercial-building-
appliances
Sign Up for Notifications
23

396
Staff Contact
Jen Vinh AQ Specialist [email protected] 909.396.2148
Emily Yen AQ Specialist [email protected]
Yanrong ZhuProgram [email protected] Heather Farr Planning and Rules Manager [email protected] Michael Krause Assistant DEO [email protected] 24

397
WeCantAffordThis.com
Costly and Dangerous Bureaucratic Regulations
Will Push Housing Costs Even Higher
Say NO to Rule 1111 & 1121
Southern California’s cost of living crisis is crushing working families and small businesses with record-breaking taxes and housing and electricity costs — leading to the highest poverty rate in the country. California’s cost of living is 42% higher than the national average. Unless defeated, Proposed Amended Rules 1111 and 1121 would be the costliest regulations SCAQMD has ever undertaken.

THE PROBLEM
The South Coast Air Quality Management District
(SCAQMD), a single-issue un-elected regulatory agency
representing Los Angeles, Orange, Riverside, and San
Bernardino counties, is currently revising two regulations (Rules 1111 & 1121) that would drive up your costs to replace all water heaters and furnaces powered by natural gas.

Combined, both regulations will impact more than 17 million people and 10 million units in single-family homes, mobile home parks, multi-family residences, office buildings,
grocery stores, and other small businesses. SCAQMD staff developed the proposed regulations behind closed doors
without transparency including public education or review.

SCAQMD Amended Rules 1111 and 1121 mandate higher
costs on consumers. Both amended regulations will force consumers to choose a much more expensive option of “allelectric” space and water heaters that cost thousands more than natural gas appliances, or require consumers to pay a fee to continue using natural gas space and water heaters.

The amendments to Rules 1111 and 1121 were unworkable
before the most recent wildfires. Now they are insensitive, impractical, and even more harmful to all Californians.

Say NO to Rule 1111 & 1121 Amendments
Hurts Working Families & Small Businesses
The amendments to Rules 1111 and 1121 would impose a significant financial burden on Southern Californians when we can least afford it.
n Higher Costs for Homeowners, Renters, and Small Businesses. LA County has the highest concentration of small, minority, and women-owned businesses in the country. The proposed changes will burden consumers with over $300 million annually or $7.7 billion over the 25-year life of these appliances.
n The proposed amendments will hit Latinos, African Americans, and economically challenged families and small businesses the hardest.
n Skyrocketing Energy Bills. Residential energy bills have already increased by more than 86% for Southern California Edison (SCE) customers since 2014. These rule modifications would further increase costs for SCE customers and those serviced by municipally owned utilities. n Electrical System Upgrades for Older Properties. Dated properties may require a complete electrical system upgrade to support the mandated switch to all-electric furnaces and heaters.

The cost varies significantly (between $4,910 and $80,000) depending on the appliance and electrical panel/wiring upgrades.
n Higher Housing and Rental Costs. The proposed rule changes would impose tens of thousands of dollars in upfront costs per housing unit and require expensive electrical panel upgrades.

These rules not only add to the cost of homeownership but could also lead to higher rents or force small landlords to sell their property, reducing the availability of affordable rental housing in the already housing-challenged four-county area.
n Expensive Appliances. All-electric appliances are costlier to purchase and more expensive to operate. One option will cost consumers more than $47,000 to switch to all-electric space and water heaters, while the other will cost at least $1,500 more.

Puts Strain on Aging Electrical Grid & Infrastructure
Southern California’s energy infrastructure is already struggling to meet increasing demand. The new amendments to Rules 1111 and 1121 will only make matters worse:
n Existing Strain on the Power Grid. Southern California’s aging electricity grid has been unable to meet current demand, with many new residential and retail projects forced to wait years for power to be made available. Communities across Southern California have been impacted by rolling blackouts and service interruptions because of strain on the system which is made worse during heatwaves, high winds, and wildfires.
n Projected Electrical Load Increases. Modifying Rules 1111 and 1121 will significantly increase electrical demand beyond existing capacity.

Puts Public Safety & Health at Risk
SCAQMD staff’s proposed changes to Rules 1111 and 1121 take a narrow view of public safety and health impacts, ignoring the significant risks they may create. n Increased Wildfire Risk. Straining an already vulnerable electrical infrastructure could lead to more wildfires caused by exposed power lines. Since 2015, power lines have sparked six of the state’s 20 most destructive wildfires, resulting in hundreds of deaths and more than $28 billion in damages.*
n Health Impacts from Wildfires. Particle pollution from electricity-caused wildfires triggers asthma attacks, heart attacks, strokes, and even death. Children exposed to wildfire smoke suffer from increased coughing, bronchitis, colds, and hospital visits.

A Flawed Scheme with Little Scientific Evidence
SCAQMD staff’s cost-benefit analysis for consumers is inadequate and unacceptable. n For decades, the SCAQMD’s rulemaking was technology neutral. Staff set emissions limits and allowed the market to determine which product or fuel would best meet those limits. n Today, District staff have arbitrarily decided to force consumers to pay a fee if they do not want full electrification. The “amended” rules present consumers with a false choice: either buy expensive all-electric water heaters and furnaces or pay more for natural gas-powered appliances — a true “lose-lose” situation for already struggling consumers. n A better approach to reducing NOx emissions would be to implement ultra-low NOx emission standards for natural gas appliances which would make them even more environmentally friendly at no additional cost to consumers.
*Does not include 2025 wildfires
Join Our Coalition Today.

Say NO to Proposed Amended Rules 1111 & 1121
Say NO to Rule 1111 & 1121 Amendments

City Council Meeting
Agenda Report
Agenda Item No. 7
SUBJECT: RESOLUTION APPROVING THE AMENDMENT OF THE

RESTATED CITY OF CALIMESA CAFETERIA PLAN AND

PERSONNEL RULES
MEETING DATE: May 5, 2025
PREPARED BY: Will Kolbow, City Manager
Darlene Gerdes, Deputy City Manager/City Clerk
RECOMMENDATION: That the City Council adopt:

1. Resolution 2025-16, A Resolution of the City Council of the City of Calimesa, California Amending the Personnel Rules and Regulations for the City of Calimesa Adopted by the City Council on November 20, 2017.

2. Resolution 2025-17, A Resolution of the City Council of the City of Calimesa, California Approving the Adoption of the Restated City of Calimesa Cafeteria Plan and Rescinding Resolution 2022-31 in its Entirety.

BACKGROUND/DISCUSSION: Section 125 of the Internal Revenue Code authorizes employers to offer employees benefits on a pre-tax basis. An employer’s benefit plan that offers benefits on a pre-tax basis is referred to as a “Section 125 Plan” or a “Cafeteria Plan” (due to the fact that the employee can select from among different benefit options, including some that are available on a pre-tax basis). The City of Calimesa has offered its employees a Cafeteria Plan which includes health benefits since 2004. Internal Revenue Code Section 125 requires that in order for an employer to offer pre-tax benefits, the employer must have an approved written Cafeteria Plan document that describes all benefits and establishes rules for eligibility and elections. The City must now update its Cafeteria Plan document, which requires Council approval in order to meet current legal standards.

Employees participating in a Cafeteria Plan must be permitted to choose among at least one taxable benefit and one qualified benefit. Examples of qualified benefits include accident and health benefits; dependent care assistance; and group term life insurance coverage.

Examples of taxable benefits include some of the AFLAC Supplemental Plans, as well as cash.

The City has offered a Cafeteria Plan consisting of various health care and medical benefits for many years.

Most recently, the City approved a restated Cafeteria Plan in 2022 to increase the benefit allotment to its employees, which required an update to the City’s Cafeteria Plan. In order to minimize revisions to the Cafeteria Plan in the future, the City’s Personnel Rules and

Regulations is being updated to reflect the City’s contribution to the Cafeteria Plan. The Cafeteria Plan is being updated to reflect this change by referencing the Personnel Rules and Regulations. The City’s Personnel Rules and Regulations are updated on a more regular basis, so this will eliminate the need to update the Cafeteria Plan every time the City’s contribution is changed.

FISCAL IMPACT: The adoption of the proposed resolution will not have an impact on the adopted budget but will ensure the City’s continued compliance with Section 125 of the Internal Revenue Code.

ATTACHMENTS:

Attachment A: Resolution 2025-16 (Updating Personnel Rules and Regulations) Attachment B: Resolution 2025-17 (Updating Cafeteria Plan) Attachment C: City of Calimesa Cafeteria Plan

RESOLUTION NO. 2025-16

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALIMESA,

CALIFORNIA AMENDING THE PERSONNEL RULES AND REGULATIONS

FOR THE CITY OF CALIMESA ADOPTED BY THE CITY COUNCIL ON NOVEMBER 20, 2017
WHEREAS, Section 2.60.010 of Chapter 2.60 of Title 2 of the Calimesa Municipal Code provies that the City Council may, by resolution, adopt personnel rules and regulations for general City employees; and
WHEREAS, Resolution 2017-41, entitled “A Resolution of the City Council of the City of Calimesa, California adopting Personnel Rules for the City of Calimesa,” was adopted by the City Council on November 20, 2017; and
WHEREAS, Resolution 2021-07 amended Rule 31 of the Personnel Rules and Regulations to amend language in Section F, Subsection 3 – Standby Time Compensation, add language in Section G – Exempt Positions and the addition of Section H – Emergency Operations Staff and Compensation; and WHEREAS, Resolution 2024-03 amended various sections and subsections of Rules 12, 20, 27, 31, 32, 34, 35, 36, 38, and 45; and
WHEREAS, there is a need to replace Rule 28 of the Personnel Rules in its entirety to update City contributions to Fringe Benefits.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CALIMESA DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. That Rule 28 – Fringe Benefits of the Personnel Rules and Regulations replacing in its entirety to further describe the Flexible Health Benefit Plan and relation contributions and attached as Exhibit “A” is approved and adopted.

Section 2. Except as otherwise amended in Exhibit “A”, the remaining provisions of the Personnel Rules and Regulations shall remain in full force and effect as written.

PASSED, APPROVED AND ADOPTED this 5
th day of May, 2025.
_____________________________________

LINDA MOLINA, MAYOR
ATTEST:
_________________________________________

DARLENE GERDES, CITY CLERK

City of Calimesa Personnel Rules and Regulations
Resolution 2025-16
Exhibit “A”
Rule 28 Fringe Benefits
A. Enrollment in Health Insurance, Dental Insurance and Vision Care Coverage. All regular employees who are employed on a full-time basis, except seasonal and temporary employees (forty [40] hours per work), shall be eligible for health, dental and vision insurance coverage, which becomes effective on the first of the month following the employment date and continuing throughout the month of separation. The City provides a Flexible Health Benefit Plan with a monthly cap where employees can choose an appropriate health plan for them and their families as defined in Schedule A and Schedule B of the City’s Cafeteria Plan. Fringe benefits may be altered on a year-by-year basis as the City’s sole discretion. Regular part-time employees receive prorated benefits if they are regularly assigned to work more than twenty (20) hours per week, except seasonal and temporary employees.

B. Flexible Health Benefit Plan Contributions. The City shall contribute the following monthly amounts:
a. For employees that elect to purchase Health Insurance, as defined in Schedule A and Schedule B of the Cafeteria Plan, the City shall contribute $1,000.00 per month.
b. For employees that waive Health Insurance, as defined in Schedule A and Schedule B of the Cafeteria Plan, the employee must provide proof, as determined by Human Resources, that comparable medical insurance is in full force and effective. Based on determination that insurance is in full force and effect, eligible employees shall receive the amount designated below. i. Employees with a most recent hire date prior to July 1, 2025, shall receive $1,000.00 per month.
ii. Employees with a most recent hire date on or after July 1, 2025, shall receive $300.00 per month.
c. Any amounts in excess of the amount designated above necessary to maintain benefits under any benefits plan selected by the employee shall be borne by the employee.
d. Any amounts remaining of the amount designated above after payment of any benefits plan selected by the employee shall be paid to the employee as cash on their paycheck. Cash payments will be considered taxable income.

RESOLUTION 2025-17

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALIMESA,

CALIFORNIA, APPROVING THE ADOPTION OF THE RESTATED CITY OF

CALIMESA EMPLOYEE CAFETERIA PLAN AND RESCINDING
RESOLUTION NO. 2022-31 IN ITS ENTIRETY
WHEREAS a Cafeteria Plan is a mechanism through which an employer can offer its employees certain pre-tax benefits; and
WHEREAS an employer’s benefit plan that offers benefits on a pre-tax basis is referred to as a “Section 125 Plan” or “Cafeteria Plan”; and WHEREAS Section 125 of the Internal Revenue Code requires an employer who offers pre-tax benefits to have an approved written Cafeteria Plan document that describes all benefits and establishes rules for eligibility and elections; and WHEREAS the City of Calimesa has offered its employees a Cafeteria Plan for employee benefits since 2004; and
WHEREAS the City restated the City of Calimesa Cafeteria Plan effective November 1, 2021, reflecting plan design changes and compliance with legal requirements; and WHEREAS the City restated the City of Calimesa Cafeteria Plan effective August 1, 2022, reflecting plan design changes and compliance with legal requirements; and WHEREAS the City desires to restate the City of Calimesa Cafeteria Plan effective as of May 5, 2025, in order to reflect plan design changes and to comply with current legal requirements; and
WHEREAS the Council desires to authorize the City Manager or the City Manager’s designee, to execute the proposed plan documents on behalf of the City, along with any future amendments that contain only non-substantive and/or administrative changes to the plan documents.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CALIMESA DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. The Council hereby adopts the amended and restated City of Calimesa Cafeteria Plan as a result of the City Council adoption of Resolution No. 2025-XX implementing changes to the Personnel Rules and Regulations which now define amounts to be contributed by the City to the Cafeteria Plan and attached hereto as “Exhibit A.” Section 2. The Council hereby authorizes the City Manager or the City Manager’s designee to execute the proposed plan documents on behalf of the City, along with any future amendments that contain only non-substantive and/or administrative changes to the plan documents.

PASSED, APPROVED AND ADOPTED this 5
th day of May 2025.
________________________________

LINDA MOLINA, MAYOR
ATTEST:
_____________________________________

DARLENE GERDES, CITY CLERK

City of Calimesa

CAFETERIA PLAN
City of Calimesa (employer) hereby adopts the City of Calimesa Cafeteria Plan (Plan) on the date set forth on the signature page hereof, for the exclusive benefit of its eligible employees and their families.

RECITALS
WHEREAS:

The Employer has provided various employee welfare benefits to its eligible employees pursuant to the provisions of the Internal Revenue Code of 1986, as amended (Code) The Employer previously adopted a cafeteria plan under Code Section 125 in order to allow its eligible employees to pay for their share of the costs for such benefits on a pretax basis.

The Employer has determined that it is appropriate to amend and restate the Plan.

OPERATIVE PROVISIONS
Now, therefore, the Employer hereby amends and restates the Plan upon the following terms and conditions:

PLAN NAME
The name of this Plan is the “City of Calimesa Cafeteria Plan”.

PLAN DATE
This Plan is hereby amended and restated as a result of the City Council adoption of Resolution No. 2025-17 implementing a changes to the Personnel Rules and Regulations that now contain the amounts contributed by the City to the Flexible Health Benefit Plan.

EXCLUSIVE BENEFIT
It is the intention of the Employer that the Plan is created and maintained for the exclusive benefit of the Employer’s eligible Employees and their Beneficiaries.

TABLE OF CONTENTS
ARTICLE 1. ESTABLISHMENT AND PURPOSE
ARTICLE 2. DEFINITIONS
ARTICLE 3. PARTICIPATION
ARTICLE 4. PAY CONVERSION AND BENEFIT ELECTIONS
ARTICLE 5. INSURANCE PREMIUMS
ARTICLE 6. HEALTH CARE REIMBURSEMENT PLAN
ARTICLE 7. DEPENDENT CARE ASSISTANCE PLAN
ARTICLE 8. FORFEITURES AND LIMITATIONS
ARTICLE 9. CLAIMS REVIEW PROCEDURES
ARTICLE 10. ADMINISTRATION AND FINANCES
ARTICLE 11. AMENDMENTS AND TERMINATION
ARTICLE 12. MISCELLANEOUS

ARTICLE 1. ESTABLISHMENT AND PURPOSE

1.1 Establishment. CITY OF CALIMESA establishes a cafeteria plan for the benefit of its employees who may participate in the Plan. The Plan shall be known as the CITY OF CALIMESA CAFETERIA PLAN.

1.2 Purpose. The purpose of the Plan is to provide Employees who may participate in the Plan the choice among different combinations of health, dependent care, and other benefits as specified in the Plan. The Plan is established in accordance with the provisions of Section 125 of the Internal Revenue Code and other applicable provisions.

1.3 Qualified Status. The Plan is intended to meet the requirements of Section 125 of the Internal Revenue Code and shall be interpreted and administered in accordance with the requirements of that section.

1.4 History. The following provisions constitute an amendment, restatement, and continuation of the CITY OF CALIMESA CAFETERIA PLAN, (established August 1, 2007 and amended and restated August 1, 2022).

ARTICLE 2. DEFINITIONS

2.1 Definitions. Whenever used in the Plan, the following words and phrases shall have the meanings set forth below unless the context plainly requires a different meaning. (a) Affiliate means any entity (other than the Employer) that is part of a group of entities that includes the Employer and that constitutes: (i) a controlled group of corporations (as defined in section 4 l 4(b) of the Code); (ii) a group of trades or businesses, whether or not incorporated, under common control (as defined in section 414(c) of the Code); or (iii) an affiliated service group (within the meaning of section 414(m) of the Code), and that adopts the Plan with the Employer's consent.
(b) Change in Status, means a Change in Status, as defined in Section

4.2(b)(2) of this Plan.
(c) COBRA means the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.
(d) Code means the Internal Revenue Code of 1986, as amended. (e) Committee means the Benefit Plan Committee of the Employer, or such other person or Committee as may be appointed by the Employer to supervise the administration of the Plan in accordance with the provisions of Article 10.

(f) Compensation of a Participant means the total of amounts paid to a Participant by the Employer and reported on the Participant's Federal Income Tax Withholding Statement (form W-2) but excluding all fringe benefits.
(g) Contract Administrator means an administrator that has contracted with the Employer to provide administrative services under the Plan. This term is not the same and is not intended to have the same meaning as the term defined in section 3(16) of ERISA.
(h) Dependent means one of the following individuals:
(1) An individual who qualifies as a dependent under the provisions of Section 152 of the Code
(2) For purposes of the Health Care Expense Account, the term "Dependent" includes a child who is otherwise a Dependent under this section and who is entitled to coverage under a qualified medical child support order or otherwise in accordance with the provisions of section 609 of ERISA.
(i) Dependent Care Assistance Account means the account established under Section 7.1 for each Participant, as increased under Section 7.2 by allocated Pay Conversion Contributions and as decreased under Section

7.3 by benefit payments made to the Participant.
(j) Effective Date means 05/05/2025, the date on which the Plan becomes effective.
(k) Eligible Employee means an Employee who works at least 30 hours per week for the Employer continuously for a period of 0 day(s), counting periods that an Employee is on leave required under FMLA or during an absence from work for duty in the uniformed services of the United States of America.
(l) Employee means an Employee of the Employer who receives compensation from the Employer. Employee status shall not be affected by a leave of absence that is Employer-approved or legally required. However, the term Employee shall not include any person employed by the Employer at a location outside the United States or an individual characterized by the employer as an independent contractor.
(m) Employee Benefit Election Form means the form described in Section

3.2. (n) Employer means CITY OF CALIMESA or its successor(s). However, where appropriate, the term Employer shall also mean an Affiliate that is the employer of a particular Participant.

(o) Employment-Related Dependent Care Expense means an amount paid by a Participant for household services or for the care of a Qualifying Individual, to the extent that such expense is incurred to enable the Participant to be gainfully employed for any period for which there are one or more Qualifying Individuals with respect to the Participant. However, (1) if such amounts are paid for expenses incurred outside the Participant's household, they shall constitute Employment-Related Dependent Care Expenses only if incurred for a Qualifying Individual who is a Dependent under the age of 13 for whom the Participant is entitled to an exemption under Section 151 of the Code or for a Qualifying Individual who regularly spends at least eight hours per day in the Participant's household; (2) if the expense is incurred outside the Participant's home at a facility that provides care for more than six individuals who do not regularly reside at the facility, the facility must comply with all applicable licensing requirements, if any; and (3) Employment-Related Dependent Care Expenses of a Participant shall not include expenses paid or incurred for services provided by (i) a child of such Participant who is under the age of 19 or (ii) an individual who is a Dependent of such Participant or such Participant's spouse. (p) FMLA Leave means a leave of absence provided to an Employee of the Employer under the Family and Medical Leave Act of 1993, as amended. (q) Health Care Expense means an expense related to the diagnosis, cure, mitigation, treatment, or prevention of disease consisting of expenses for medical care within the meaning of Section 213 of the Code, including, but not limited to, payments for the purpose of affecting any structure or function of the body, or for any hospital or nursing charges, optometrically, ophthalmological or auditory care, routine physical examinations, well-baby care, dental and orthodontic care, psychiatric care, prescription drugs, insulin, eyeglasses or contact lenses, hearing-aid appliances, similar prosthetic devices, medical-related transportation or medical or dental insurance out-of-pocket expenses.

The term "Health Care Expense" does not include cosmetic surgery or other similar procedures, unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease. The term cosmetic surgery means any procedure, which is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease.

The term "Health Care Expense" shall generally include medicine and drugs that do not require the prescription of a physician for their use by an individual, including but not limited to antacids, allergy medicine, pain relievers and cold medicines. The term "Health Care Expense" shall not, however, include illegally procured medicine and drugs, toiletries,

cosmetics or sundry items, or any other item generally considered to be a medicine or drug that does not treat a medical condition. (r) Health Care Expense Account means the account established under Section 6.1 for each Participant, as increased under Section 6.2 by allocated Pay Conversion Contributions and as decreased under Section

6.3 by benefit payments made to the Participant.
(s) Highly Compensated Employee means a highly compensated individual or participant as defined in Code Section 125(e); a highly compensated employee as defined in Code Section 129(d)(2); or a highly compensated individual as defined in Code Section 105(h)(5).
(t) Insurance Plan means the plan(s) maintained by the employer to provide accident and health benefits to Employer's Employees, which is partially or fully insured by an independent third party.
(u) Key Employee means a key employee as defined in Code Section 416(i)(l). (v) Participant means a person who is an Eligible Employee on or after the Effective Date, who applies to participate in the Plan, and who satisfies the participation conditions of Article 3.
(w) Pay Conversion Contributions means the contributions of a Participant made by salary reduction agreement in accordance with Section 4.1. (x) Period of Coverage, with respect to any Plan Year, means that Plan Year. However, for any Employee:
(1) Who becomes a Participant after the start of a Plan Year, the Period of Coverage means the period commencing on the effective date of the Participant's participation and extending through the remainder of the Plan Year, or
(2) Who ceases being a Participant after the start of a Plan Year, the Period of Coverage means the period commencing on the first day of the Plan Year and extending through the last day of the Participant's participation.
(y) Plan means the CITY OF CALIMESA CAFETERIA PLAN as amended or restated from time to time.
(z) Plan Year means each twelve-month period ending July 31. (aa) Premium Only Option means the option to pay insurance plan premiums on a pre-tax basis through the Plan.

(bb) Qualifying Individual means:
(i) a Dependent of a Participant who is under the age of 13, with respect to whom the Participant is entitled to an exemption under Section 151 of the Code, and
(ii) a Dependent or spouse of a Participant who is physically or mentally incapable of caring for himself.

2.2 Gender and Number. Except as otherwise indicated by context, masculine terminology also includes the feminine, and vice versa, and terms used in the singular may also include the plural.

ARTICLE 3. PARTICIPATION

3.1 Participation Conditions. As a condition of participation and receipt of benefits under this Plan, each Participant shall be required to:
(a) Furnish to the Committee a completed Employee Benefit Election Form along with required documentation
(b) Designate and apply a portion of his or her Compensation as Pay Conversion Contributions in accordance with the provisions of Article 4 (c) Observe all Plan requirements, rules, and regulations (d) Consent to inquiries by the Committee with respect to any physician, hospital or other provider of health care or other services involved in a claim under this Plan
(e) Submit to the Committee all reports, bills, and other information that the Employer may reasonably require

3.2 Application to Participate. As a condition of participation, each Eligible Employee shall complete, sign, and deliver to the Committee an Employee Benefit Election Form before his or her first day of participation. It is by this form that the Eligible Employee applies to participate in the Plan, designates the required portion of his or her Compensation for that Plan Year as Pay Conversion Contributions, makes a benefit election, and supplies any other pertinent information that the Committee reasonably requires. Unless otherwise required by the Committee, the application shall be delivered to the Committee prior to the first day of an Employee's participation.

3.3 Commencement of Participation. After an Eligible Employee satisfies the participation requirements of this Article 3, the Eligible Employee may become a Participant the latter of:
(a) 30 days following date of employment.

(b) Immediately following the date on which the Committee receives the Participant's signed Employee Benefit Election Form.

3.4 Cessation of Participation. Participation in the Plan will end at the time that an individual ceases to be a Participant as defined in Section 2.l(v). With respect to periods following the date participation otherwise ends, Pay Conversion Contributions will cease but coverage may continue for the remainder of the period of coverage with respect to which the required premium has been paid.

ARTICLE 4. PAY CONVERSION AND BENEFIT ELECTIONS

4.1 Pay Conversion. Each Participant shall designate a portion of his or her Compensation for each Plan year to be applied as Pay Conversion Contributions. The portion shall be specified by the Participant at the time that a benefit election is made under Section 4.2 on the Employee Benefit Election Form. However, the maximum is as follows:
(a) The maximum annual contribution per Participant to pay for insurance premiums under Article 5 shall be the actual cost of such premium payments.
(b) The maximum annual contribution per Participant to this Health Care Expense Account under 6.1 shall be maximum allowed by the Internal Revenue Service (IRS) under IRC Section 125(i). You have the option to roll over the IRS maximum allowed for unused FSA funds remaining at the end of the plan year.
(c) The maximum annual contribution per Participant to his or her Dependent Care Assistance Account under Section 7.1 shall be the lesser of: (i) $5,000.00 (with respect to a calendar year), or, instead, $2,500.00 (with respect to a calendar year) if a Participant is married and files a separate Federal income tax return for that year; (ii) the Participant's earned income or (iii) the spouse's earned income, if applicable.

The Employer may, if necessary, adjust the rate to account for benefit election adjustments prescribed by Article 5. Except as otherwise provided by the Employer, Pay Conversion Contributions shall reduce the Participant's Compensation ratably on each pay day beginning on or after the first day of the Participant's participation, and shall continue in effect until changed in accordance with Section 4.2.

4.2 Benefit Elections.
(a) Each Participant shall make a benefit election, in the manner provided in the Plan, to apply his or her Pay Conversion Contributions during each Plan Year, in such proportions as he or she chooses, to the following:

(1) To pay the Participant's premiums for Employer-sponsored health care insurance and other insured Employer-sponsored plans, as set forth in Article 5
(2) To pay the Participant's premiums for Employer-sponsored group term life insurance as set forth in Article 5
(3) To apply to the Participant's Health Care Expense Account for that Plan Year in accordance with Article 6
(4) To apply to the Participant's Dependent Care Assistance Account for that Plan Year in accordance with Article 7 a Participant's initial benefit election shall be made as part of his or her application to participate under Section 3.2 and the election shall remain in effect until changed in accordance with this Section. A Participant may change her benefit election for a subsequent Plan Year by providing written notice to the Employer on a new Employee Benefit Election Form prior to the first day of the Plan Year for which such change is to be effective in accordance with rules prescribed by the Committee. (b) A Participant's benefit election for any Plan Year shall be irrevocable during the Plan Year, except that:
(1) The Employer may limit a Participant's contributions in accordance with Section 8.2
(2) Change in Status
(A) If the Participant has a Change in Status (as defined in Subsection (B) below), he shall be entitled to revoke or modify his benefit election in a manner that is consistent with such Change in Status (as defined in Subsection (C) below), by providing written notice to the Committee within 31 days of the status change. An authorized change in the Participant's benefit election due to a Change in Status shall be effective the latter of:
(i) Eligibility following the date the Change in Status occurs
(ii) Immediately following the date on which the Committee receives the Participant's written notice
(B) A Change in Status is an event that falls into one of the following categories:
(i) Legal Marital Status changes: including marriage,
death of spouse, divorce, legal separation and
annulment.

(ii) Changes in Number of Dependents: including birth,
death, adoption and placement for adoption.
(iii) Employment Status changes of the Participant or the Participant's spouse or dependents: termination or
commencement of employment, strike or lockout,
commencement or return from unpaid leave of
absence, change of worksite or change in employment
status.
(iv) Dependent Satisfies or Ceases to Satisfy the
Requirements for Unmarried Dependents: change in
student status or dependent no longer qualifies
because of age.
(v) Change in Residence: change in place of residence of the employee, spouse or dependent.
(C) For accident or health coverage and group term life, the election change is consistent with the Change in Status only if the election change is on account of and corresponds with a change in status that affects eligibility for coverage under an employer's plan.

For other qualified benefits, the election change is consistent with the Change in Status only if it meets one of the following conditions:
(i) The election change is on account of and corresponds with a change in status that affects eligibility for
coverage under an employer's plan.
(ii) The election change is on account of and corresponds with a change in status that affects expenses described in IRC Section 129 with respect to the Dependent Care
FSA.

The consistency rule of this Subsection shall be
interpreted in accordance with the Special Consistency
rules of applicable law.
(3) Special Events
(A) Participant may revoke or modify his benefit election during the current Plan Year if the revocation or modification is on account of a Qualified Medical Child Support Order (QMCSO) or other Judgements or Orders under 29 USC Section
1169(a); on account of the special enrollment rights of the Health Insurance Portability and Accountability Act of 1996 (HIPAA); on account of an employee, spouse or dependent

becomes entitled to coverage under Part A or Part B of
Medicare or Medicaid or on account of a COBRA Qualifying Event.
(B) A Participant, on account of an unpaid FMLA Leave, may revoke his benefit elections. When he returns from unpaid FMLA Leave after having revoked his benefit elections on account of taking FMLA Leave he may have his benefit elections reinstated on the same terms as prior to taking FMLA Leave, to the extent that reinstatement is required under the FMLA. A reinstated Participant shall not have a greater right to benefits for the remainder of the Plan Year than a Participant who is continuously working during the Plan Year. (4) Cost/Coverage Changes
(A) Cost Changes
(i) The Employer may modify a Participant's contribution in accordance with the automatic adjustment in Section 5.2. (ii) If the cost of coverage of an Employer-sponsored Plan described in Section 5.1 significantly increases or significantly decreases, a Participant who is covered under that Employersponsored Plan may choose to pay the increased or decreased premium or revoke coverage under the plan for which the premiums are being increased and elect coverage under a plan providing similar coverage, if available.

If the cost of coverage of an Employer-sponsored Plan
described in Section 5.1 significantly decreases, an Eligible Employee who is not a Participant may choose to commence participation in the plan with the decrease in cost.
(iii) With respect to a Dependent Care Assistance Plan under Article 7, a Participant may modify a benefit election if the cost for service provided by a dependent care provider, who is not a relative of the Participant, increases or decreases.
(iv) Cost changes covered by this Section 4.2 (b)(4)(A) include but are not limited to, cost changes initiated by the Eligible Employee or the Employer.
(B) Coverage Changes
(i) If coverage provided under a plan described in Section 5.1 or Article 7 is significantly curtailed that is not a loss of coverage, a Participant who is covered under that plan shall be entitled to change his benefit election by revoking coverage under the

plan being curtailed but must elect coverage under a plan providing similar coverage, if available.
(ii) If coverage provided under a plan described in Section 5.1 or Article 7 is significantly curtailed that is a loss of coverage, a Participant who is covered under that plan shall be entitled to change his benefit election by revoking coverage under the plan being curtailed and elect coverage under a plan providing similar coverage, if available. (iii) If during a period of coverage, a new benefit plan is added or an existing benefit option is significantly improved, an Eligible Employee may elect the new benefit plan or improved benefit plan and make a corresponding election change with respect to other plans providing similar coverage.
(iv) A Participant may make a change in such Participant's benefit election if such change is on account of and corresponds with a change made under another employer plan if (a) such change is permitted under the other employer's cafeteria plan (or qualified benefit plan) and Code requirements applicable to such change; or (b) this Plan permits participants to make an election for a period of coverage which is different from the period of coverage under the other cafeteria plan (or qualified benefit plan).
(C) This Section 4.2(b)(4) does not apply to an election change with respect to the Health Care Reimbursement Plan described in Article

6. (5) A Participant who separates from the service of the Employer during a period of coverage may revoke existing benefit elections and terminate the receipt of benefits for the remaining portion of the period of coverage. If the Employee should return to service within 30 days for the Employer during the same plan year, the Employee shall reenroll with the same benefit elections prior to termination for the remaining portion of the period of coverage. If the Employee should return to service of the Employer after 30 days, but during the same plan year, the Employee may re-enroll for the remaining portion of the period of coverage.
(6) Notwithstanding the provisions of Section 4.2 (b)(2) and 4.2 (b)(4) no change shall be permitted unless both the old and the new benefit plans permit such change.

4.3 Contribution during Leave. With respect to Participants who go on a leave of absence which is Employer-approved or unpaid FMLA Leave, contributions required or permitted to be made by them under the Plan may be made by one of the following methods, which must be nondiscriminatory, as agreed between the Employee on leave and the Committee before the commencement of the leave of absence or the applicable coverage period:

(a) Contributions may be made by the Employee on leave on a regular basis (generally on an after- tax basis)
(b) Contributions may be made by the Employee on leave by prepayment (generally on a pre-tax basis with respect to the same Plan Year during which the leave occurs)
(c) Contributions advanced by the Employer on behalf of an Employee on leave may be re-paid by the Participant when he or she returns from leave on either a pre-tax with respect to the same Plan Year during which the leave occurs or on an after-tax basis.

ARTICLE 5. INSURANCE PREMIUMS

5.1 Coverages. To the extent a Participant so elects, a portion of the Participant's Pay Conversion Contributions shall be used to pay the Participant's share of the cost of coverage (single or family coverage, whichever applies) under the Employersponsored Plans listed in Schedule A and Schedule B and incorporated by reference herein. The benefit description in each of those plans is incorporated by reference into this Plan. The terms and conditions of each of those plans shall govern the provision of benefits under each plan.

5.2 Automatic Adjustments. If during the Plan Year the cost of Employer-sponsored Plans described in Section 5.1 which is selected by a Participant changes and the change is not significant, the Participant's benefit election shall, with respect to premium payments for that health plan, automatically be adjusted to reflect such change. A Participant shall not be permitted to change coverage during a Plan Year because of change in the cost of coverage, except as otherwise provided in Article 4.

ARTICLE 6. HEALTH CARE REIMBURSEMENT PLAN

6.1 Health Care Expense Accounts. The Committee shall establish for each Participant who elects the benefit option under this Article 6 a Health Care Expense Account for each Plan Year. Each Health Care Spending Account shall contain zero dollars ($0.00) initially, however at the commencement of each Plan Year $550.00 may be rolled over to the next plan year if necessary.

6.2 Increases in Health Care Expense Account. A Participant's Health Care Expense Account for a Plan Year shall be increased by the portion of the Participant's Pay Conversion Contributions for that Plan Year that he has elected to apply toward his Health Care Expense Account in accordance with Section 4.2.

6.3 Decreases in Health Care Expense Account. The balance in a Participant's Health Care Expense Account for a Plan Year shall be reduced by the amount of any benefits paid to a Participant under Section 6.4.

6.4 Health Care Benefits. Subject to limitations contained in other provisions of this Plan, a Participant who elects the benefit option under this Article 6 and who incurs Health Care Expenses attributable to himself, his spouse or his dependents during his Period of Coverage for a Plan Year shall be entitled to receive from the Plan full reimbursement for the entire amount of such expenses to the extent of the amount of the Participant's benefit election for the Health Care Expense Account for that Plan Year.

6.5 Reimbursement Procedures. In order to receive reimbursement for health care expenses under this Article 6:
(a) The Participant must complete a Claim Form, attach (i) an itemized billing statement from the health care provider, (ii) an explanation of benefits from the Participant's insurer or (iii) other satisfactory proof of claim, and forward the documents to the Administrator. The Participant must provide additional information reasonably requested by the Administrator.

Claims for medicine and drugs that do not require a physician's prescription may be substantiated through itemized receipts indicating the medicine or drugs purchased. Additional documentation from a medical professional may be required to demonstrate that the medicine or drug treats an existing medical condition.
(b) A request for reimbursement must relate to Health Care Expenses incurred during the Participant's period of coverage. For this purpose, the term "incurred" refers to when the health care services were provided. In no event may claims incurred in one plan year be submitted during the following Plan Year, nor shall any unpaid claims be the liability of the Plan, the Employer, or the Administrator.
(c) A request for reimbursement for Health Care Expenses incurred during a Plan Year must be received by the Administrator either during the Period of Coverage or on or before 90 days following the Period of Coverage. (d) Reimbursement, if made, shall be made by the Administrator directly to the Participant, upon which the Employer, the Plan, and the Administrator shall be relieved of all further responsibility with respect to the expenses reimbursed.

Upon presentation .of a claim, a Participant shall expressly represent that the item for which a claim is made is not subject to reimbursement under any policy described in Article 5 or from any other source and such item will not be used as a deduction under Section 213 of the Code. (e) The Employer may establish a minimum reimbursement amount.

6.6 Limitations on Health Care Benefits. Despite the provisions of this Article 6, no benefits shall be paid under this Article:

(a) If and to the extent that such reimbursement or payment is covered under any insurance policy or policies, whether paid for by the Employer or the Participant, or under any other health and accident plan by whomever maintained. In the event that there is such a policy or plan in effect providing for such reimbursement or payment, in whole or in part, then to the extent of the coverage under such policy or plan, the Employer and the Plan shall be relieved of any liability.
(b) To the extent that an expense has been submitted for reimbursement from a Participant's Dependent Care Assistance account.
(c) For any expenses incurred for medical insurance premiums.

6.7 Continuation of Health Care Coverage. To the extent required by COBRA, a qualified beneficiary (as defined in section 607 of ERISA) who would lose Health Care coverage under the Plan upon the occurrence of a qualifying event (as described in section 603 of ERISA) shall be permitted to continue Health Care coverage under the Plan by electing to pay the applicable premiums, on an aftertax basis, in accordance with procedures established by the Committee that are consistent with Part 6 of Title I of ERISA and any regulations under that Part. The Employer shall provide notice to each covered Employee and spouse of their rights under COBRA in accordance with applicable law and the regulations thereunder.

The City of Calimesa contracts with TASC to administer the COBRA program adhering to the required procedures for COBRA benefits.

6.8 Additional Requirements for Group Health Plans. The Health Care Reimbursement Plan shall be interpreted and administered so as to provide coverage, under written procedures established by the Administrator, with respect to individuals for which coverage is required by the applicable provisions of ERISA section 609 and any regulations under those provisions.

6.9 Separate Written Plan. For purposes of the Code, this Article shall constitute a separate written plan providing for the reimbursement of Health Care Expenses.

To the extent necessary, other provisions of the Plan are deemed incorporated by reference in this Article 6.

6.10 HIPPA Privacy Rule. To the extent and effective required by HIPAA, the Employer agrees that it shall:

1. use and disclose protected health information as described by HIPAA ("PHI") only for payment and health care operations under the HFSA Plan and not use or further disclose PHI other than as required by law;

2. ensure that any agents or subcontractors to which it provides PHI received from the Health Care Reimbursement Plan as described in this Article 6 (the "HFSA Plan") agree to same restrictions and conditions that apply to the Plan Sponsor;

3. not use or disclose PHI for employment-related actions or in connection with any other employee benefit plan;

4. report to the HFSA Plan any use or disclosure of information that is inconsistent with the permitted uses or disclosures described herein;

5. make PHI available to plan participants, consider their amendments and, upon request, provide them with an accounting of PHI disclosures;

6. make its internal practices and records relating to the use and disclosure of PHI received from the HFSA Plan available to the United States Department of Health and Human Services;

7. if commercially reasonable, return or destroy all PHI received from the HFSA Plan and maintained in any form, retaining no copies of such information when no longer needed for the purpose for which the disclosure was made, except that, if such return or destruction is not commercially reasonable, limit further uses and disclosures to the purposes that make the return or destruction infeasible;

8. permit only those employees of an Employer who are responsible for payment and health care operations under the HFSA Plan to receive PHI;

9. restrict access to and use of PHI by the employees described in 8 above to the HFSA Plan administrative functions that the Employer performs for the HFSA Plan, except as otherwise allowed by HIPAA;

10. resolve any issues of noncompliance with HIPAA through intervention by an appropriate officer of the Employer; and

11. ensure the adequate separation between the group health plan and the plan sponsor required in HIPAA as set forth in 45 CFR § 164.504(f)(2)(iii).

ARTICLE 7. DEPENDENT CARE ASSISTANCE PLAN

7.1 Dependent Care Assistance Account. The Committee shall establish for each Participant who elects the benefit option under this Article 7, a Dependent Care Assistance Account for each Plan Year. Each Dependent Care Assistance Account shall contain zero dollars ($0.00) initially and at the commencement of each Plan Year.

7.2 Increases in Dependent Care Assistance Account. A Participant's Dependent Care Assistance Account for a Plan Year shall be increased each payroll period by the portion of the Participant's Pay Conversion Contributions for that Plan Year that he has elected to apply toward his Dependent Care Assistance Account in accordance with Section 4.2.

7.3 Decreases in Dependent Care Assistance Account. The balance in a Participant's Dependent Care Assistance Account for a Plan Year shall be reduced by the amount of any benefit paid to or on behalf of a Participant under Section

7.4. 7.4 Dependent Care Benefits. Subject to limitations contained in other provisions of this Plan, a Participant who elects the benefit option under this Article 7 and incurs Employment-Related Dependent Care Expenses during his Period of Coverage for a Plan Year shall be entitled to receive from the Plan full reimbursement for the entire amount of such expenses to the extent of the amount contained in the Participant's Dependent Care Assistance Account for that Plan Year. However, no reimbursement shall be paid pursuant to this Article to the extent that an expense has been submitted for reimbursement from a Participant's Health Care Expense Account.

7.5 Reimbursement Procedures. In order to receive reimbursement for dependent care expenses under this Article 7:
(a) The Participant must complete a Claim Form, attach a statement of service from the dependent care provider or other proof of claim, and forward the documents to the Administrator. The Participant must provide additional information reasonably requested by the Administrator.
(b) A request for reimbursement that exceeds the balance in the Participant's Dependent Care Assistance Account shall be processed only to the extent of the amount of the account balance. The excess shall be carried over to the following reimbursement period and processed at that time. However, after the Participant's Dependent Care Assistance Account has been exhausted, claims remaining unpaid at the end of the Plan Year shall be canceled. In no event may these claims be resubmitted during the following Plan Year, nor shall any unpaid claims be the liability of the Plan, the Employer, or the Administrator.
(c) A request for reimbursement must relate to Employment-Related Dependent Care Expenses incurred during the Participant's Period of Coverage. For this purpose, the term "incurred" refers to when the dependent care services were provided.
(d) A request for reimbursement for Dependent Care Expenses incurred during a Plan Year must be received by the Administrator either during the Period of Coverage or on or before 90 days following the Period of Coverage. (e) Reimbursement, if made, shall be made by the Administrator directly to the Participant, which shall cause the Employer, the Plan, and the Administrator to be relieved of all further responsibility with respect to the expense reimbursed.
(f) The Employer may establish a minimum reimbursement amount.

7.6 Separate Written Plan. For purposes of the Code, this Article shall constitute a separate written plan providing a program for the reimbursement of dependent care assistance expenses. To the extent necessary, other provisions of the Plan are deemed incorporated by reference in this Article 7.

ARTICLE 8. FORFEITURES AND LIMITATIONS

8.1 Account Forfeitures. Any amounts contributed to a Participant's Health Care Expense Account or Dependent Care Assistance Account which have not been used to pay claims for benefits incurred by the end of each period of coverage after the period for filing claims has expired shall be forfeited by a participant.

8.2 Limitation on Contributions and Benefits for Certain Participants. The Committee shall determine, before or during any Plan Year, whether the Plan fails to satisfy for the Plan Year any nondiscrimination requirement imposed by the Code, or any limitation on benefits provided to Employees who are considered Highly Compensated Employees, Key Employees and/or 5% owners under applicable Code provisions. The Committee shall take action that it deems appropriate, under rules uniformly applied to similarly situated Participants, to assure compliance with such requirements or limitations. Such action may include, without limitation, a modification of elections by Highly Compensated Employees, Key Employees and/or 5% owners with or without the consent of such Employees.

ARTICLE 9. CLAIMS REVIEW PROCEDURES

9.1 Determinations. The Employer (or the Employer's designee) shall notify a Participant in writing within 30 days of his written application for benefits of his eligibility or non-eligibility for benefits under the Plan unless special circumstances require an extension of time for perfecting the claim. Notice must be given to the claimant of the extension within 30 days of his submission of the claim. The notice must specify the reason for the extension of the date with which a decision is expected to be rendered.

9.2 Notice. If the Employer (or the Employer's designee) determines that a Participant is not eligible for all or part of the benefits, the notice shall set forth (a) the specific reasons for such denial, (b) a specific reference to the provision of the Plan on which the denial is based, (c) a description of any additional information or material necessary for the claimant to perfect his claim and a description of why it is needed, and (d) an explanation of the Plan's claims review procedure and other appropriate information as to the steps to be taken in the event the participant wishes to submit the denied claim for review.

9.3 Review. If a Participant is determined to be ineligible for benefits, or if the Participant believes that he is entitled to greater or different benefits, he shall have the opportunity to have his denied claim reviewed by the Committee by filing a petition for review with the Committee within 180 days after he received the claim denial notice. The petition shall state the specific reasons, which the Participant believes, entitle him to benefits or to greater or different benefits. Within 60 days after the Committee receives the petition for review, the Committee shall afford the

Participant (and his counsel, if any) an opportunity to present his position to the Committee orally or in writing, and the Participant (or his counsel) shall have the right to review the pertinent documents.

9.4 Decision. The Committee shall notify the Participant of its final decision in writing within the 60-day period after receiving the request for review stating specifically in writing the basis of the decision in a manner calculated to be understood by the Participant and the specific provisions of the Plan on which the decision is based.

If a Participant dies, the same procedure shall apply to his beneficiaries.

ARTICLE 10. ADMINISTRATION AND FINANCES

10.1 Administration. The Plan shall be administered by the Committee referred to in Section 2.l(e). The Committee shall consist of one or more members appointed by the Employer (the Members). The Members of the Committee shall be the named fiduciaries (as described in Section 402 of ERISA) and the plan administrator (as described in Section 3(16)(A) of ERISA) under the Plan.

10.2 Powers of Committee. The Committee shall act by a majority of its then Members, by meeting or by writing filed without meeting, and shall have the following powers, rights, and duties in addition to those vested in it elsewhere in the Plan:
(a) To adopt rules of procedure and regulations it determines may be necessary for the proper and efficient administration of the Plan, consistent with the provisions of the Plan.
(b) To enforce the Plan in accordance with its terms and with rules and regulations adopted by the Committee.
(c) To determine all questions arising under the Plan, including claims for benefits, interpret the Plan, and to remedy ambiguities, inconsistencies, or omissions.
(d) To maintain adequate records concerning the Plan and its administration. (e) To furnish the Employer with such information with respect to the Plan as they may require for tax or other purposes.

A written statement by a majority of Members or by an authorized Member that the Committee has taken or authorized any action shall be conclusive in favor of the person relying on the statement.

10.3 Delegation by the Committee. The Committee may employ agents and counsel (who may also be employed by or represent the Employer) and delegate to them such powers as the Committee deems desirable. Any such delegations shall be in writing and shall reflect the unanimous action of the Members then acting. The delegation shall describe the advice to be rendered or the functions and duties to be performed by the delegate.

10.4 Uniform Rules. The Committee shall uniformly apply rules and regulations adopted by it to all persons similarly situated.

10.5 Information to be furnished to Committee. The Employer shall furnish the Committee such information as may be required by the Committee. The records of the Employer as to an Employee's or Participant's period of employment, termination of employment, and compensation will be conclusive on all persons unless determined by the Committee to be incorrect. Participants and other persons entitled to benefits under the Plan shall furnish to the Committee such evidence or information as it considers desirable to carry out the Plan.

10.6 Committee Decisions Final. To the extent permitted by law, any interpretation of the Plan and any decision on any matter within the discretion of the Committee made by it in good faith are binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known, and the Committee shall make such adjustment on account thereof as it considers equitable and practicable.

10.7 Compensation and Expenses. No compensation shall be paid to any Member as such. However, the reasonable expenses of a Member incurred in the performance of a Committee function shall be reimbursed by the Employer in such proportions as the Employer decides.

10.8 Interested Committee Member. A Member may not decide any matter or question concerning his own benefits under the Plan unless such decision would be made by him under the Plan if not a Member.

10.9 Resignation or Removal of Committee Member. A Member may resign at any time by giving advance written notice to the Employer, and the other Members.

The Employer may remove a Member at any time by giving advance written notice to him and the other Committee Members.

10.10 Appointment of Successor Committee Member. The Employer shall fill any vacancy in the membership of the Committee within a reasonable period of time and shall give prompt written notice thereof to the Committee Members. While there is a vacancy in the membership of the Committee, the remaining Committee Members shall have the same powers as the full Committee until the vacancy is filled.

10.11 Indemnification of the Committee. To the extent permitted by law, the Committee and its individual Members shall be indemnified by the Employer, and held harmless by the Employer against, any and all liabilities, losses, costs, or expenses (including legal fees and expenses) of whatsoever kind and nature that may be imposed on, incurred by, or asserted against the Committee or its Members at any time by reason of the performance of a Committee function, but only if the Committee or its Members did not act dishonestly or in a willful violation of the law or regulation under which such liability, loss, cost, or expense arose.

10.12 Finances. The costs of the Plan shall be borne by CITY OF CALIMESA. For purposes of this Plan, Pay Conversion Contributions shall be deemed to be contributions by the Employer.

ARTICLE 11. AMENDMENTS AND TERMINATION

11.1 Amendments. The Employer may amend the Plan, in full or in part, at any time.

Any amendment shall be timely filed with the Plan documents and reasonable notification provided to Employees.

11.2 Benefits Provided Through Third Parties. In the case of any benefit provided pursuant to any insurance policy or other contract with a third party, the Employer may amend the Plan by changing insurers, policies, or contracts without changing the language of this Plan document, provided that copies of the contracts or policies are filed with the Plan documents and the Participants are reasonably informed (to the extent required by law) as to the effects of any such changes. If there is any perceived conflict or inconsistency at any given point in time among the description of benefits contained in the contract or policy and the other Plan documents, the terms of the contract or policy shall control.

11.3 Termination. The Employer intends the Plan to be permanent, but necessarily must, and does, reserve the right to terminate the Plan at any time. In the event of a Plan termination, Pay Conversion Contributions will cease. Thereafter neither the Employer nor any of its Employees shall have any further financial obligations under the Plan except such that have accrued up to the date of termination and have not been satisfied.

ARTICLE 12. MISCELLANEOUS

12.1 No Guaranty of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between the Employer and any Employee. Nothing contained in the Plan shall give any Employee the right to be retained in the employ of the Employer or to interfere with the right of the Employer to discharge any Employee at any time, nor shall it give the Employer the right to require any Employee to remain in its employ or to interfere with the Employee's right to terminate his employment at any time.

12.2 Limitation on Liability. The Employer does not guarantee benefits payable under any insurance policy or other similar contracts described or referred to in the Plan, and any benefits thereunder shall be the exclusive responsibility of the insurer or other entity that is required to provide such benefits under the policy or contract.

12.3 Non-Alienation. No benefit payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, or encumbrance of any kind.

12.4 Exclusive Benefit. The Plan shall be maintained for the exclusive benefit of Employees. Benefits shall be paid only in accordance with the Plan's terms.

Reasonable expenses of administering the Plan may be paid only in accordance with the Plan's terms.

12.5 Applicable Law. The Plan and all rights under the Plan shall be governed by and construed according to the laws of the State of CALIFORNIA, except to the extent preempted by Federal Law.

IN WITNESS WHEREOF, the Employer has caused this Plan to be executed on this 5 th
day of May, 2025.

ATTEST:

By:____________________________
Darlene Gerdes, City Clerk
THE CITY OF CALIMESA, a municipal
corporation of the State of California
By:

Bonnie Johnson, City Manager

SCHEDULE “A”
Schedule of Benefits Miscellaneous Employees
As of May 5, 2025
Miscellaneous Employee Benefits
All employees who are employed on a full-time basis, except seasonal and temporary employees (forty [40] hours per week), shall be eligible for health, dental and vision insurance coverage, which becomes effective 30 days following the hire date and continuing throughout the month of separation. The City provides a Flexible Health Benefit Plan with a monthly amount defined in Rule 28 of the City’s Personnel Rules and Regulations, where employees can choose an appropriate health plan for them and their families.

Holiday’s Observed: New Year’s Day, Martin Luther King Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veteran’s Day, Thanksgiving Day and Friday after Thanksgiving, Christmas Eve, Christmas Day, New Year’s Eve. 2 floating holidays and employee birthday.

Benefit Description
Health Insurance Health Net and Kaiser Permanente
(Employee and Family Plans)
Dental Insurance Delta Dental
(Employee and Family Plans)
Vision Vision Service Plan (VSP)
(Employee and Family Plans)
Life Insurance Lincoln Life Insurance
(Mgmt. 1.0 times annual salary – all others $50,000)
Flexible Spending
Account
Ceridian
(Optional up to maximum allowed by IRS per year with a rollover option to the maximum allowed by IRS to new plan year)
Dependent Care
Account
Ceridian
(Optional $2,500 to $5,000 per year)
Mission Square
Retirement Deferred
Comp
Mission Square Retirement (Formerly ICMA-RC)
(Voluntary Deferred Compensation Plan)
AFLAC Voluntary Supplemental Plans available as follows:

Short Term Disability, Accidental, Term Life, Dental, Specified Health Event, Cancer, etc.

CalPERS

RETIREMENT
New hires with recent service with CalPERS, are on the 2% at 60 plan and a 3-year average formula with the City paying the employee rate.

New hires who established CalPERS membership prior to January 1, 2013 and who is hired by a different CalPERS employer after January 1, 2013 after a break in service of greater than six months will pay 6.2% of the employee rate and will be subject to the 2% @ 62 Plan, with a 3-year average formula and a mandatory contribution of normal costs as established by the new Pension Reform Act Law.

New hires with no CalPERS services as of January 1, 2013, will pay 6.2% of the employee rate and will be subject to the 2% @ 62 Plan, with a 3-year average formula and a mandatory contribution of normal costs as established by the new Pension Reform Act Law.

The City does not participate in Social Security.

SCHEDULE “B”
Schedule of Benefits Fire Department Employees
As of May 5, 2025
Fire Department Employee Benefits
All employees who are employed on a full-time basis, except seasonal and temporary employees, shall be eligible for health, dental and vision insurance coverage, which becomes effective 30 days following the hire date and continuing throughout the month of separation. The City provides a Flexible Health Benefit Plan with a monthly amount defined in Rule 28 of the City’s Personnel Rules and Regulations, where employees can choose an appropriate health plan for them and their families. Fringe benefits may be altered on a year-by-year basis as the City may see fit.

Benefit Description
Health Insurance Health Net and Kaiser Permanente
(Employee and Family Plans)
Dental Insurance Delta Dental
(Employee and Family Plans)
Vision Vision Service Plan (VSP)
(Employee and Family Plans)
Life Insurance Lincoln Life Insurance
(Mgmt. 1.0 times annual salary – all others $50,000)
Flexible Spending Account
Ceridian
(Optional up to maximum allowed by IRS per year with a rollover option to the maximum allowed by IRS to new plan year)
Dependent Care Account Ceridian
(Optional $2,500 to $5,000 per year)
Mission Square
Retirement Deferred
Comp
Mission Square Retirement (Formerly ICMA-RC)
(Voluntary Deferred Compensation Plan)
AFLAC Voluntary Supplemental Plans available as follows:

Short Term Disability, Accidental, Term Life, Dental, Specified Health Event, Cancer PARS

RETIREMENT
Fire Department Employees participate in PARS Retirement. City pays 7.5% for the employee. Employee may contribute additional funds to their plan but cannot change the amount once funds are determined. The City does not participate in Social Security.

Fire Department is on a
48/96 Hour Work Schedule
Vacation and Sick
benefits as defined in
Personnel Rules and
Regulations
$600 Annual
Uniform Allowance

SCHEDULE “C”
Employee Benefit Election Form (see following 2 pages)
As of May 5, 2025

City of Calimesa

EMPLOYEE BENEFIT ELECTION FORM
Employee Name:_________________________________________________________ Hire Date:_______________________________________________________________ Step 1: Medical Enrollment
Health Net Options
I elect to enroll in the Healthnet Gold 80 Value PPO 750/15 I elect to enroll in the Healthnet Gold 80 PPO 250/25
I elect to enroll in the health Net Platinum 90 PPO 0/15 I elect to enroll in the Value HMO 30 Excel Care GF
Kaiser Options
I elect to enroll in the Kaiser Platinum 90 HMO 0/10 + Child Dental Alternative I elect to enroll in the Kaiser Platinum 90 HMO 0/20 + Child Dental I elect to enroll in the Kaiser Gold 80 HMO 250/35 + Child Dental I decline to enroll in Medical Plans and provide proof of other medical coverage Step 2: Dental Enrollment
Delta Dental
I elect to enroll in Delta Dental Employee Only
I elect to enroll in Delta Dental Employee + One
I elect to enroll in Delta Dental Employee + Family
I decline to enroll in Delta Dental
Step 3: Vision Enrollment
VSP Vision Plan
I elect to enroll in VSP Employee Only
I elect to enroll in VSP Employee + One
I elect to enroll in VSP Employee + Family
I decline to enroll in VSP Coverage
Step 4: Optional Selections
Flexible Spending Plans (FSA)
I elect to enroll in the FSA Program at no more than $2,850.00 Annually I decline to enroll in the Flexible Spending Plan (FSA) I elect to enroll in the Dependent Care Flexible Spending Plan $2,500 to no greater than $5,000 I decline to enroll in the Dependent Care Flexible Spending Plan (FSA)

Deferred Compensation (Mission Square Retirement- formerly ICMA) I elect to enroll in the Deferred Compensation 457 Program I decline to enroll in the Deferred Compensation 457 Program I elect to enroll in AFLAC Supplemental Insurance Plans I decline to enroll in AFLAC Supplemental Insurance Plans _______________________________________________________________________ Employee Signature Date
This completed Employee Benefit Election Form along with enrollment forms must be returned to Human Resources

City Council Meeting
Agenda Report
Agenda Item No. 8
SUBJECT: 4

TH STREET - PAVEMENT REHABILITATION AGREEMENT WITH

SAN GORGONIO PASS WATER AGENCY
MEETING DATE: May 5th, 2025
PREPARED BY: Will Kolbow, City Manager
Michael Thornton, City Engineer
RECOMMENDATION: That the City Council authorize the Mayor to execute an agreement with San Gorgonio Pass Water Agency (SGPWA) for 4th Street Pavement Rehabilitation (Flordason Drive to County Line Road).

DISCUSSION: On November 4th, 2024, the City Council awarded the second round of the Citywide Pavement Rehabilitation construction to Onyx Paving Company (Onyx). Prior to the start of construction, SGPWA advised that it intends to construct a pipeline along County Line Road and 4 th Street (in the same location as the proposed street rehabilitation construction). 4th Street construction also includes construction of curb and gutter along SGPWA property frontage.

Construction is scheduled to begin in August 2025. To avoid construction within a recently rehabilitated roadway, SGPWA has agreed to complete the proposed rehabilitation after pipeline and street improvement construction provided the City pays costs associated therewith. Using unit values from the Onyx contract and quantity estimates prepared by City staff, the cost to construct SGPWA 4th Street pavement rehabilitation is $118,762. Staff also requests a 10% construction contingency be authorized. The proposed scope of work is shown on Agreement Exhibit A and the costs estimate breakdown is shown on Agreement Exhibit B – the Agreement is attached herein.

For County Line Road, final pavement rehabilitation will be complete by the City of Yucaipa as part of its annual Pavement Management Program after SGPWA pipeline construction is complete.

FISCAL IMPACT: No additional appropriations are needed – Council approved Citywide Pavement Rehabilitation Project funding that includes $130,638 (estimated cost and 10% contingency) will be used.

ATTACHMENTS:

Attachment A: Paving Agreement for 4
th Street By and Between City of Calimesa and San
Gorgonio Pass Water Agency

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PAVING AGREEMENT FOR FOURTH STREET

BY AND BETWEEN

THE CITY OF CALIMESA
AND

THE SAN GORGONIO PASS WATER AGENCY
This Paving Agreement ("Agreement") is made as of ________________, 2025, by and between the SAN GORGONIO PASS WATER AGENCY, a public agency ("Agency”) and the CITY OF CALIMESA, a municipal corporation (“City”). Agency and City are hereinafter sometimes collectively referred to as the “Parties” or individually as a “Party.”

RECITALS
A. The County Line Recharge Basin Project is a joint project between the San Bernardino Valley Municipal Water District and Agency to construct facilities that will convey imported water from the State Water Project to a recharge facility in City’s boundaries. Said work includes installation of a pipeline in Fourth Street which is located within City’s boundaries.

B. City is undertaking the repaving of multiple streets and initiated repaving of Fourth Street. City has directed its contractor to stop repaving work on Fourth Street at the location where Agency’s pipeline installation work will begin.

C. The Parties desire to coordinate completion of repaving work on Fourth Street with the pipeline installation work.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and conditions set forth in this Agreement, and for other good, valuable, and adequate consideration, the Parties hereto agree as follows:

AGREEMENT

1. Completion Of Repaving Work. Agency will contract for the work to complete the repaving of Fourth Street. Descriptions of the location, plans, requirements and work for the repaving of Fourth Street are set forth in Exhibit “A” attached hereto and incorporated herein by reference (“Work”). The Work will be performed by Agency in its reasonable discretion and in accordance with its rights and obligations as a public agency performing public works projects within public rights-of-way.

2. Cost and Expense. The City has received bids and contracted for its repaving project. Therefore, unit costs and quantities are known and presented in Exhibit “B” attached hereto and incorporated herein by reference. Quantities are based on the scope breakdown presented in Exhibit “A”. Upon completion of the Work, the City will compensate the Agency for the amount shown in Exhibit “B.” In the event the cost of the Work exceeds the amount in Exhibit “B,” due to unforeseen change in the scope detailed in Exhibit “A”, the Parties shall agree to a reasonable amended amount. The City agrees to waive inspection fees related to the work on 4th Street as presented in Exhibit “A”.

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3. Payment Process. Agency will proceed to make payment to its contractor upon Agency’s receipt of progress and final payment requests in connection with the Work. Upon completion of the Work shown on Exhibit “A”, Agency will submit to City a written statement which sets forth the total amount due, as indicated in Exhibit “B” or a reasonable amended amount as set forth in Section 2. City shall then submit payment to Agency of the amount due and owing pursuant to said statement within 60 days from the date of said statement.

4. Right of Entry. During the term of this Agreement and subject to the terms and conditions set forth herein, City hereby grants to Agency and its contractor a non-exclusive rightof-entry in, on, across and over that portion of Fourth Street as more particularly described in Exhibit “A” for the purpose of performing the Work.

5. Compliance With Legal and Regulatory Requirements. The Parties shall perform their respective activities under this Agreement in a skillful and workmanlike manner, and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Each Party represents that it, its contractors and agents shall have all licenses, permits and approvals of whatever nature that are legally required to perform their respective activities.

6. Effective Date. This Agreement shall be effective on the date of full execution of this Agreement by both Parties (“Effective Date”).

7. Term and Termination. The term of this Agreement shall be from the Effective Date to the date of completion of the Work. This Agreement shall remain in effect during the term unless earlier terminated as provided under this Agreement.

8. Notice and Opportunity to Cure. If either Party to this Agreement believes that the other Party has failed to perform any obligation of that Party in accordance with the terms of this Agreement (any such failure being a “Default”), the Party alleging the Default shall provide written notice (“Default Notice”) to the other Party, setting forth the nature of the alleged Default. Unless otherwise provided by a specific term of this Agreement, the Party claimed to be in Default shall have: (i) with respect to a Default involving the payment of money, ten (10) days after its receipt of the Default Notice to completely cure such Default, and (ii) with respect to any other type of Default, thirty (30) days from the receipt of the Default Notice to completely cure such Default or, if such Default cannot reasonably be cured within such thirty (30) day period, to commence the cure of such Default within the thirty (30) day period and diligently prosecute the cure to completion thereafter. If the Party claimed to be in Default does not cure such Default within the time periods and procedures as set forth herein, the Party alleging Default may then pursue applicable remedies including, but not limited to, termination of this Agreement.

9. General Provisions.
(a) Indemnification. Each Party (“Indemnitor”) hereby agrees to defend, indemnify and hold free and harmless the other Party (“Indemnitee”) from and against any and all liability, expense, including defense costs and legal fees, and claims for damages of any nature whatsoever, including, but not limited to, bodily injury, personal injury, death or property damage, arising from or connected with Indemnitor’s activities under this Agreement. Indemnitor’s duty to

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indemnify Indemnitee shall survive the expiration or other termination of this Agreement as to any injuries, occurrences or claims occurring or alleged to have occurred prior to its expiration or termination.
(b) Tort Liability. Government Code Section 895.2 imposes certain tort liability jointly upon public agencies solely by reason of such public agencies being parties to an agreement as defined in Government Code Section 895. Therefore, the Parties hereto, as between themselves, pursuant to the authorization contained in Government Code Sections 895.4 and 895.6, each assumes the full liability imposed upon it or any of its officers, agents, representatives or employees by law for injury caused by a negligent or wrongful act or omission occurring in the performance of this Agreement, to the same extent that such liability would be imposed in the absence of Government Code Section 895.2. To achieve this purpose, each Party indemnifies and holds harmless the other Party for any loss, cost, or expense, including reasonable attorneys’ fees that may be imposed upon or incurred by such other Party solely by virtue of Government Code Section 895.21.
(c) Notices. Written notices to be given to either Party must be given by personal delivery or by registered or certified mail addressed and delivered as set forth below.

Other correspondence and invoices may be sent by first-class mail, addressed and delivered as set forth below:

If to City:

Calimesa City Hall
908 Park Avenue
Calimesa, CA 92320
Attn: City Manager
If to Agency:
______________________________
______________________________
______________________________
Attn: _____________________
(d) Incorporation of Recitals. The Recitals set forth above are incorporated herein and made an operative part of this Agreement.
(e) Time of the Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a Party of the benefits of any grace or use period allowed in this Agreement.
(f) Force Majeure. Neither Party shall be liable for any failure to perform its obligations under this Agreement if such failure was due to acts of God, embargoes, inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions,

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judicial orders, enemy or hostile governmental action, fire or other casualty, or other causes beyond the non-performing Party’s reasonable control and not due to any act by that Party. (g) No Third-Party Beneficiaries. This Agreement is made solely for the benefit of the Parties to this Agreement and their respective successors and assigns, and no other person or entity may have or acquire a right by virtue of this Agreement. (h) Entire Agreement and Modification of Agreement. This Agreement and all exhibits referred to in this Agreement constitute the final, complete and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all other prior or contemporaneous oral or written understandings and agreements of the Parties. No Party has been induced to enter into this Agreement by, nor is any Party relying on, any representation or warranty except those expressly set forth in this Agreement. This Agreement may not be amended, nor any provision or breach hereof waived, except in a writing signed by both Parties.

IN WITNESS WHEREOF, each of the Parties have caused this Agreement to be executed by its respective duly authorized officers. The effective date of this Agreement shall be the date first above written.

CITY OF CALIMESA
By: ______________________________
Linda Molina
Mayor

SAN GORGONIO PASS WATER AGENCY
By: ______________________________
Lance Eckhart
General Manager/Chief Hydrogeologist

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EXHIBIT “A”
Description of the Work

Know what'sbelow.

Callbefore you dig.

R
CONSTRUCTION NOTES:SIGNING AND STRIPING CONSTRUCTION NOTES:

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EXHIBIT “B”
Estimated Cost and Expense of the Work

1 Grind (Cold-Mill) Existing Asphalt Concrete (1.5"
Min.)
38,088 SF $ 0.28 $ 10,664.72
2 Sawcut and Remove Existing Asphalt Base Course,
Aggregate Base and/or Subgrade (5.5" Total Section
Removal)
13,960 SF $ 1.11 $ 15,496
$ 26,160
1 Construct 4" Miscellaneous Aggregate Base over
12" Compacted Native
171 CY $ 66.00 $ 11,261
2 Construct 1.5" Min. Asphalt Concrete Base Course 139 TON $ 111.00 $ 15,447 3 Construct 1.5" Min. Asphalt Concrete Overlay 519 TON $ 111.00 $ 57,593 4 Adjust Water/Gas Valve to Grade 5 EA $ 100.00 $ 500
5 Adjust Sewer Manhole to Grade 6 EA $ 1,300 $ 7,800
$ 92,601
Base Construction Subtotal: $ 118,762
Subtotal:

Site Improvements
Subtotal:

Site Demolition
Exhibit B - Quantity and Cost Breakdown
4th Street Pavement - SGPWA Agreement
April 8, 2025

City Council Meeting
Agenda Report
Agenda Item No. 9
SUBJECT: COUNCIL DISCUSSION AND CONSIDERATION OF A BUDGET

ADJUSTMENT FOR ADDITIONAL FUNDING FOR THE CALIMESA

CULTURAL AND PERFORMING ARTS ASSOCIATION FOR
FISCAL YEAR 2024-2025
MEETING DATE: May 5, 2025
PREPARED BY: Will Kolbow, City Manager
RECOMMENDATION: That the City Council:
1) Discuss and consider additional funding for the Calimesa Cultural and Performing Arts Association for Fiscal Year 2024-2025.
2) If additional funding is approved, adopt Resolution 2025-18, A Resolution of the City Council of the City of Calimesa, California, Amending the FY 2024-25 Budget to Include an Adjustment in the Community Services Community Partnerships Account in the General Fund.

BACKGROUND: At the June 3, 2024 meeting, Council approved Fiscal Year Budget for 2024- 2025. The approved budget provided for an allocation of $4,000 to the Calimesa Cultural and Performing Arts Association (CCPAA). Council approved an $8,000 allocation in the Fiscal Year 2023/2024 budget with the preface that it would be for the 2023/2024 fiscal year budget only.

Steve Negrete, President of the CCPAA addressed the Council at their June 17, 2024 meeting, requesting an increase in the approved allocation from $4,000 to $8,000 stating that he was unaware that the Fiscal Year 2023/2024 allocation of $8,000 was only approved for that fiscal year.

The City Council approved the additional funding on July 15, 2024. Full funding was then provided to CCPAA for their 2024 Concerts on the Green series.

DISCUSSION: On February 18, 2025, the City Council approved, in concept, a competitive process to be utilized for our Community Partnership program for the Fiscal Year 2025-26. Staff has committed to building the framework for the City Council’s consideration in late summer/early fall.

At the March 3, 2025, meeting, Mr. Negrete appeared before the City Council to request $8,000 for their 2025 Concerts on the Green series. This was followed up by a letter from Mr. Negrete dated April 7, 2025. The reason that Mr. Negrete is requesting funding earlier than in the past is that the CCPAA intends to host their concerts earlier in the year, beginning next month. Mr. Negrete has stated, and it has been verified from looking at their financial information provided, that the City’s contribution is their primary funding source for their concerts.

Staff is seeking direction from the City Council on this request for funding. A Resolution is attached that the City Council may adopt if they choose to make the contribution at this time. The dollar amount is left blank and will be filled in with the amount approved by the City Council, if any.

FISCAL IMPACT: The attached Resolution will provide the funding for this request if approved by City Council. It will be funded by unreserved General Fund balance.

ATTACHMENTS:

Attachment A: Resolution 2025-18

RESOLUTION 2025-18

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CALIMESA, CALIFORNIA, AMENDING THE FY 2024-25 BUDGET

TO INCLUDE AN ADJUSTMENT IN THE COMMUNITY SERVICES

COMMUNITY PARTNERSHIPS ACCOUNT IN THE GENERAL
FUND
WHEREAS, the City of Calimesa provides funding for various nonprofit programs in the City; and
WHEREAS, the Calimesa Cultural and Performing Arts Association hosts the Concerts on the Green series every summer; and

WHEREAS, the City of Calimesa Fiscal Year 2024-25 Budget included a $4,000 contribution for the 2024 Concerts on the Green series; and WHEREAS, at the July 15, 2024, City Council meeting, the City Council approved a request from the Calimesa Cultural and Performing Arts Association President for an additional $4,000 for the 2024 Concerts on the Green series, therefore providing a total of $8,000; and
WHEREAS, the City received a request for $8,000 from the Calimesa Cultural and Performing Arts Association in order to host the 2025 Concerts on the Green series; and WHEREAS, the City Council would like to provide additional funds for the 2025 Concerts on the Green series.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CALIMESA HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS:

The Fiscal Year 2024-25 General Fund Budget is hereby amended as follows:
• Increase appropriations in account 01-4900-7800 by $_________.

PASSED, APPROVED, and ADOPTED this 5
th day of May 2025.
_____________________________________

LINDA MOLINA, MAYOR
ATTEST:
_________________________________

DARLENE GERDES, CITY CLERK